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Where is Support in the EUR/USD?
The euro is trading well above its overnight low of 1.1877, but its price action this morning indicates that investors are disappointed by the G20. The G20 meeting this weekend was a complete dud because policymakers failed to use the opportunity to soothe the markets. No real action was expected but this was one of the few opportunities for policymakers to shock the market into stability. If not for Hungary's attempt to retract their comments made on Friday about the possibility of default, the EUR/USD would probably be trading much closer to its 4 year low. Finance Ministers and Central Bankers from around the world spent a great deal of time talking about the Eurozone but barely anytime on the euro. This implies that the euro is not at emergency levels and the speed of the decline is not reckless enough to raise red flags for policymakers. For the time being, the world is treating this as a euro centric problem that needs to be resolved within its own borders. The ECOFIN meeting is on Tuesday and technical details related to the Special Purpose Vehicle designed to help countries facing funding difficulties will be discussed.
This could be the only opportunity this week for European policymakers to stabilize the euro, because we don't expect the ECB to lend support to the currency. The market clearly wants Europe to get their act together and calm things down, but the European Central Bank may do more to hurt the euro than help it when they meet later this week. With inflationary pressures muted, the ECB needs to keep monetary policy ultra easy to prevent a double dip recession in Europe. We expect the central bank to remain dovish and push off any plans to normalize monetary policy, which could exacerbate the decline in the EUR/USD.
What is the Fed up to? Meanwhile there is a notice on the Federal Reserve's website this morning about an expedited meeting for today's review and determination of the advance and discount rates. It is not clear whether this is anything significant especially following the dovish comments from Bernanke last week but another discount rate hike would be one of the Fed's next steps to normalizing monetary policy.
Where is Support in the EUR/USD?
From a technical perspective, the 2 key levels for potential support in the EUR/USD are 1.1640 (the 2005 low) and the psychologically significant 1.15 level. From a valuation standpoint, the EUR/USD is still overvalued. Using consumer prices, the fair value of the EUR/USD is approximately 1.12 but the OECD estimates the currency pair's fair value to be closer to 1.17.
it's all about the momo and right now it's buying dollars.
now that was a great read. makes you think behind all of the fake gold we are seeing and hearing
and we thought we were in a recession
Man the euro has no bottom in sight right now.
It has been tommorrow, next week and next month for 5 years now.
Top Stories
* Equity indices off 3% across the globe as risk aversion accelerates
* UK GDP in line at 0.3% vs. 0.2% last
* Nikkei off -3% as Korean tensions escalate, Europe called lower
* Oil at $68.50/bbl as risk sold off
* Gold at $1189/oz.
Overnight Eco
* NZD Inflation Expectations 2.8% vs. 2.7%
* CHF UBS Consumption Indicator 1.76 vs. 1.68
* EUR Industrial New Orders 5.2% vs. 2.2%
* GBP Revised GDP 0.3% as forecast
* GBP Index of Services 0.2%
Event Risk on Tap
* USD S&P/CS Composite-20 HPI expected at 2.5%
* USD CB Consumer Confidence expected at 59.1
* USD HPI expected at 0.0%
* USD Richmond Manufacturing Index expected at 25
Price Action
* USD/JPY slips below 90.00 as risk aversion accelerates
* AUD/USD tumbles to .8100 on risk liquidation flows
* GBP/USD weak all night as 1.4250 lows come into view
* EUR/USD risk sell off accelarates with 1.2140 lows in sight
Risk aversion dominated overnight trade in the currency market with risk FX continuing to fall through the mid morning European session as geopolitical tensions and further stress in the Eurozone financial sector pushed both euro and pound close to their recent lows. Euro tumbled through the 1.2200 level on fears that weakness in the Spanish banking system could lead to another credit crunch in the region. Stress on the Spanish banking system intensified after four regional savings banks said on Monday that they had reached a preliminary agreement to merge some operations. The merger was viewed by the market as a hasty attempt to consolidate assets as Spanish banks struggle to absorb record nonperforming loans in the real estate sector.
Aside from the financial problems in Spain the markets were also rattled by the geo-political tension in Asia. According to Bloomberg, The North Korea Intellectuals Solidarity group said on its web site that the country’s military was put on alert and the U.S. announced plans yesterday to conduct anti-submarine exercises with South Korea following the March 26 torpedoing of a warship.
The escalation of tensions between South and North Korea is especially worrisome to the currency market because Asia has been the diver of global growth over the past 12 months. Any threat of military action could freeze capital markets in the region and greatly damage trade activity. With Eurozone hobbled by the sovereign debt crisis, US still recovering from the bursting of the real estate bubble Asia stands as the sole bastion of economic growth. Therefore, if the North/South Korea conflict turns violent bringing China into the mix risk aversion flows will undoubtedly accelerate sending high beta FX to fresh yearly lows.
On the economic front the calendar remains light with only the 2nd revision of UK GDP on the docket. The data printed at 0.3% as forecast as manufacturing recovery gained momentum. However, the underlying figures were mixed with household spending flat versus up 0.4% the quarter prior while government spending continued to rise by 0.5% leaving it higher by 3.1% from a year ago. Overall the UK GDP data paints a very tenuous picture of the economy and one that is increasingly reliant on government spending to prop up demand. Given the fact that the new UK government is intent on curtailing the budget deficit and will therefore reduce spending, chances are good that UK GDP could contract once again as the year progresses.
In North America today the economic calendar carries US Consumer confidence and House price index data. Consensus calls are for an increase in CC to 59.1 from 57.9 but as the result of the turmoil in the capital markets the data could miss to the downside. If US equities follow Asia and Europe the risk aversion trade is likely to continue during US trading hours and the shorts could make a run at the yearly lows in the EUR/USD of 1.2140. With sentiment once again quite gloomy, the path of least resistance in risk FX appears to be down.
FX Upcoming
Currency GMT EST Release Expected Prior
USD 13:00 9:00 USD S&P/CS Composite-20 HPI 2.5% 0.6%
USD 14:00 10:00 USD CB Consumer Confidence 59.1 57.9
USD 14:00 10:00 USD HPI 0.0% -0.2%
USD 14:00 10:00 USD Richmond Manufacturing Index 25 30
that's wild, he was only 39
2010/05/20 17:28:00 Stops getting ripped in EUR/USD here
2010/05/20 18:38:00 EUR/USD Tenkan line is at 1.2619; a daily close above suggests potential to the Kijun line, currently at 1.2905....
so far this is all I see
2010/05/20 17:33:00 Hearing rumors now of coordinated intervention, but nothing confirmed
2010/05/20 17:32:00 market rumors. purportedly a large macro name just bought north of 400M euro/usd. The run up was dramatic and very quick. The US stock market is off the lows, giving the euro an additional bid. this flow could follow thru.
wow EU is taking off and I want to short it but I am scared like little girl holding a lolly pop lol
WOW what a spike
wow that will be interesting to watch
thanks bud I will play with it
I hear ya lololol
U.S. Data Adds Pressure on Risk
As we have seen over the past 24 hours, it takes a lot to eliminate fear in the forex markets. Rumors of ECB intervention lifted the euro and British pound yesterday but the gains were extremely short-lived. In yesterday's daily report, we talked extensively about how the intervention was more likely to be SNB and not ECB and perhaps other traders have finally realized this as well because the euro and pound have come under additional selling pressure. If the ECB were to intervene with the goal of engineering a permanent bottom in the currency, they would have been far less subtle. Despite the lack of any major news overnight, risk aversion has once again gripped the currency market. With the exception of the Japanese Yen, all of the major currencies have fallen against the U.S. dollar. The worst performing currencies have been the Australian dollar and British pound while the best performing was surprisingly - the euro. ECB President Trichet's comment that they are "not engaged in any form of Quantitative Easing" has provided temporarily relief.
Today's U.S. economic reports have contributed to the risk aversion by pushing the dollar sharply lower against the Japanese Yen. In particular, the latest jobless claims figures were extremely ugly as first time unemployment claims rose from 446k to 471k, the highest level in a month. The report was much worse than analysts had anticipated and raise concerns about the sustainability of the labor market recovery. As long as claims remain above 400k, the U.S. economy is not out of the woods. The combination of low inflation and a slow recovery is one of the main reasons why the Federal Reserve is in no rush to raise interest rates. Although the Philly Fed index edged slightly higher, leading indicators fell for the first time since March 2009 which suggests that the recovery in the U.S. economy is slowing. This is very discouraging because it reinforces the risk of contagion. Also, even though manufacturing activity in the Philadelphia region accelerated last month, inflationary pressures eased, while new orders and employment fell. The only reason why the Philly Fed index increased was because of a pickup in shipments. Overall, today's U.S. economic releases were disappointing which will add pressure on risk.
Previous session overview
The pair Euro against the U.S. dollar traded during the Asian session between the lowest price at 1.23213 and the highest price at 1.24312, the pair trading now around the level of 1.23301.
Regarding the pair Sterling against U.S. dollar traded during the Asian session between the lowest price at 1.43195 and the highest price at 1.44657, the pair trading now around the level of 1.43449.
Finally the pair of U.S. dollar against the Japanese Yen traded during the Asian session between the lowest price at 91.008 and the highest price at 91.875, the pair trading now around the level of 90.975.
Market Expectations
EUR/USD :We advised to monitor the trading today for the pair euro against the U.S. dollar , Since the stability of trading above the level of 1.24300 may lead the price to make a big correction movement , and penetration for the level of 1.22900 will lead the price to decline again , so we advised to monitor the trading today carefully.
GBP/USD :Determined indicators show a negative signs for the pair Sterling against the U.S. Dollar which may lead the price to decline again, we are waiting a clear penetration for the support level at 1.43200 to achieve this expectation, With reference to any pretention for the resistance level at 1.44750 will lead the price to big corrective movement to the level of 1.46552.
USD/JPY :We expect a bearish intraday direction; targeting the attack of 91.050 then paves the way towards 90.300. It is vital that stability is achieved below 92.800 to insure the bearish morning scenario this morning is achieved.
Top Stories
* Aussie hits .8250 in Asian trade as de-risking continues
* UK Retail Sales bit better than forecast at 0.3%
* Asia falls -1.5% but Europe recovers to trade 1.4% up
* Oil above $72.50/bbl as risk rebounds
* Gold tumbles to $1182/oz but bounces to $1192/oz. last
Overnight Eco
* AUD MI Inflation Expectations 3.6% vs. 4.1%
* JPY Prelim GDP 1.2% vs. 1.4%
* JPY Prelim GDP Price Index -3.0% vs. -2.9%
* CHF ZEW Economic Expectations ______
* EUR German PPI 0.8% vs. 0.6% eyed
* GBP Retail Sales 0.3% vs. 0.2% eyed
Event Risk on Tap
* CAD Leading Index expected at 0.7%
* USD Unemployment Claims expected at 439K
* USD Philly Fed Manufacturing Index expected at 21.9
* USD CB Leading Index expected at 0.3%
Price Action
* USD/JPY plunges below 91.00 in late Asia but rebounds to trade 91.30
* AUD/USD selling pressure pushes it to .8250 but bargain hunters take it to .8350 by mid mornign Europe
* GBP/USD massive vol all night long as it bounces between 1.4400-1.4300
* EUR/USD 1.2400 remains resistance to the corrective bounce
The euro continued its recovery in overnight Asian and early European trade making several forays into the 1.2400 area as short covering and rumors of a possible ECB intervention propped up the unit. A strong recovery in European equities which were up 1.4% by mid morning trade also helped calm the markets and temper some of the risk aversion flows that were so dominant earlier in the week.
Not all risk currencies stabilized however, as Aussie continued to see massive de-risking action tumbling to .8250 in late Asia before bargain hunters and profit taking for the shorts pushed it back above the .8300 figure. The AUD/USD has now fallen more than 550 points this week - a remarkable decline given the fact that Australia still enjoys some of the best fundamentals in the G-20 block. Nevertheless, as we noted earlier, the Aussie is plagued by three concerns: decline in commodities, slowdown in China and the possible end of the tightening cycle from the RBA. Still, at these levels the unit is being priced for a double dip recession and unless that scenario becomes a distinct possibility over the next several months, the Aussie should find support near the .8000 level and stands a good chance of staging a rally back to the .8500-.8700 zone if capital markets settle down in the summer.
In UK the Retail Sales numbers surprised to the upside providing a modicum of support for the pound. Retail Sales rose for the third straight month printing at 0.3% vs.0.2% eyed, although sales of food fell at the steepest rate in more than a year. The UK consumer continues to spend albeit modestly suggesting that UK Q2 GDP growth is likely to be tepid. Cable was volatile all night long bouncing between 1.4300 and 1.4400 and continues to face stiff resistance at 1.4500.
So far the rebound in risk is following the classic bear market pattern suggesting that the recent bounces in both euro and sterling are nothing more but counter trend short covering moves. Euro faces strong resistance at the 1.2500 level while pound faces overhead at 1.4500. The key question going forward is whether most of the selling has been done. We have argued for several days that the selloff in risk currencies has reached a sentiment extreme, but after a few days of consolidation we also believe that risk FX could revisit the lows as shorts test the mettle of the market. Certainly the price action in the Aussie suggests that investor sentiment remains strongly bearish and it may yet take some time to for markets to stabilize.
In North American session today, the eco calendar is relatively light with only the weekly jobless claims LEI and Philly Fed on the docket. If both the LEI and Philly Fed data miss their mark, risk aversion could increase as the day progresses if equity traders begin to price in a slowdown in US economic rebound. That is turn could prove problematic for the euro which is still struggling to recapture the 1.2400 handle. On the other hand if equities rally, the short covering squeeze in euro could accelerate as the day progresses and longs will no doubt try to push the late shorts out of their 1.2500 barrier stops.
FX Upcoming
Currency GMT EST Release Expected Prior
CAD 12:30 8:30 CAD Leading Index 0.7% 1.0%
USD 12:30 8:30 USD Unemployment Claims 439K 444K
USD 14:00 10:00 USD Philly Fed Manufacturing Index 21.9 20.2
USD 14:00 10:00 USD CB Leading Index 0.3% 1.4%
Previous session overview
The pair Euro against the U.S. dollar traded during the Asian session between the highest price at 1.22241 and the lowest price at 1.21437 which is the lowest level since 16th April 2006, the pair is currently trading around the level of 1.21879.
The pair Sterling against the U.S. dollar traded between the highest level at 1.43354 and the lowest level 1.42377 which is the lowest level since 30th March 2009, the pair trading now around the level 1.43260.
Finally the pair U.S. dollar against the Japanese Yen traded between the highest level at 92.248 and the lowest level at 91.552 , the pair trading now around the level of 91.990.
Market Expectations
EUR/USD :We expect today more decline for the pair Euro against the U.S. dollar after breakthrough the support level at 1.23100 , we expect today a decline for the pair to the target of 1.20450 , this expectation require a close of the four hours candlestick below the resistance level of 1.23100.
GBP/USD :We expect more decline for the pair Sterling against the U.S. dollar to the target of 1.41170 then 1.40620, these expectations require a stability of trading below the resistance level of 1.44050.
USD/JPY :Some fluctuation is expected around the level of 92.330 for the pair U.S. dollar against the Japanese yen , followed a bearish reversal, where the pair through it can achieve the bearish intraday direction to the target of 91.220, stability of trading below the level of 92.800 necessary to achieve these expectations.
Top Stories
* Merkel -A failure of the euro means a failure of Europe
* BOE - Conatgion could increase of cost of UK government ban
* Nikkei off -0.5% Europe plunges -3.47% on ban impact
* Oil at $71.58/bbl
* Gold tumbles to $1211/oz.
Overnight Eco
* AUD Westpac Consumer Sentiment -7.0% vs. -1.0%
* AUD Wage Price Index 0.9%
* JPY Revised Industrial Production 1.2% vs. 0.4%
* GBP MPC Meeting Minutes 0-0-9
Event Risk on Tap
* CAD Wholesale Sales expected at 0.3%
* USD CPI expected at 0.2%
* USD FOMC Meeting Minutes
Price Action
* USD/JPY tumbles to 91.30 as risk aversion explodes
* AUD/USD breaks .8500 on risk liquidation flows
* GBP/USD below 1.4300 as BoE minutes cautious
* EUR/USD holds 1.2150 so far as brunt of selling absorbed
The euro held its ground despite massive selling pressure as a result of German government ban on short selling of certain financial stocks, bonds and CDS instruments that has created havoc in the capital markets and left the single currency as the principal instrument to express a negative view on the Eurozone economy. The euro tumbled more than 300 points in the wake of the announcement yesterday as traders pressed their short positions in North American trade. But the unit stabilized in Asia and so far has been able to hold the 1.2150 level in good two way price action.
German Chancellor Angela Merkel stated that a “failure of the euro means failure of Europe” in what some analysts took to be a veiled threat to market speculators that German fiscal officials will act in force to dampen the recent price volatility that has created a near panic amongst investors and raised concerns that the monetary union could be in danger of fragmentation. As we wrote earlier, “Much like the similar move made by the US authorities in the wake of the Lehman bankruptcy, the sudden action by Barfin is an attempt to stabilize the EU sovereign credit market which has been under relentless assault by shorts over the past several months. One of the key criticisms of naked shorting is that it can create outsized speculative positions far in excess of the actual notional value of the underlying product. For example the buying of CDS on Southern European sovereign debt could exceed the actual value of the bonds by a factor of 10 or more. Without the need to deliver collateral, shorts could increase their positions with impunity and essentially create a skewed one way market. The Barfin action is an attempt to change this dynamic as they seek to ease the pressure on the credit markets. “
For the time being the German government action appears to have worked as credit spreads have narrowed in absence of pressure from the shorts, but it remains to be seen if the price action will stabilize at these levels. We noted that with everyone in the market focused on EUR/USD 1.2000 level the trade has become more crowded than a Tokyo commuter train and the risk of a short squeeze has increased markedly. On the other hand if 1.2100 is given the momentum could quickly push the unit through 1.2000 as capitulation sets in.
Meanwhile in UK the BoE minutes provided little fresh information with MPC member voting 0-0-9 to maintain the QE level at the current 200 billion base. However UK monetary officials acknowledged the fact that contagion fears could raise the cost of UK government debt going forward and that news weighed heavy on the pound which slipped below the 1.4300 handle in mid morning London trade. We continue to be concerned about the downside risks to the currency given the fragile nature of the recovery in the UK economy and the massive fiscal deficit problems facing the new government. Tomorrow’s UK Retail sale could provide some short term guidance as to the health of the consumer and if the data misses to the downside, it could push cable through the recent lows at 1.4250.
In North America today the only report of interest will be the FOMC notes due out at 14:15 GMT. However, the focus will lie squarely on the EUR/USD once again with 1.2000 the next target of the shorts. For now the shorts have been unable to penetrate the 1.2150 lows set in Asia and if the level holds through North America, the chance of a short squeeze rises materially unless the market is hit with yet another exogenous news shock.
FX Upcoming
Currency GMT EST Release Expected Prior
CAD 12:30 8:30 CAD Wholesale Sales 0.3% -1.2%
USD 12:30 8:30 USD CPI 0.2% 0.1%
USD 18:00 2:00 USD FOMC Meeting Minutes
that will be something if EU breaks below 1.20 but I see parity coming with all of these other countries jumping on the welfare band wagon
normal for some and others are still homeless. I'm just blessed I was 200 yards from the water
4:30am UK CPI y/y 3.5%(E) 3.4%(P) 0.3%(S) 50M
E = Expected
P = Previous
S = Surprise Factor
M = Expected Movement in Pips if surprise factor is reached
***
NEWS TRADING
Tuesday May 18, 2010
[4:30am NY Time]
We'll be trading the high impact UK Consumer Price Index release at
4:30am NY Time today. We'll be looking at the yearly release figure
and the market could react with lots of volatitility as CPI is the
basic measurement of Inflation, therefore expect to see more
exaggerated moves if we get a huge surprise in the release. Here is
the consensus for this release:
UK CPI y/y Forecast 3.5% Previous 3.4%
GBP/USD BUY 3.8% SELL 3.2%
We are looking a surprise factor (or deviation) of 0.3%. If the
Inflation number increases to of 3.8%, which above BOE's inflation
target, we will BUY of GBP/USD. If the Inflation number decreases
to 3.2% or less, we'll look to SELL GBP/USD. Historically, even
with a slight difference of 0.1%, market usually overreact. If our
deviation is hit, there is a strong possibility that the market will
move 50 pips immediately.
When CPI rises above 3.0% an automatic inflation letter is trigger
from BOE Governor King to the Exchequer Darling explaining why
inflation is above 3.0%. Therefore, if we do get a 3.8% or above
CPI release, GBP may turn bullish as this inflation letter will send
a message that MPC may be looking to adjust its monetary policy to
curb inflation soon. However, considering the current market
sentiment, I'd caution any long term trade on GBP, therefore use a
small take profit target and get in and out of the market as soon as
possible.
DEFINITION
"CPI, Consumer Price Index, is a statistical estimate of the
movement of the prices of goods and services bought for consumption
purposes by households. Its computation uses price data collected
for a sample of goods and services from a sample of sales outlets in
a sample of locations for a sample of times and estimates of the
shares of the different expenditures in the total covered by the
index which are usually based upon expenditure data obtained for
sampled periods from a sample of households Wikipedia)." It is also
known as the "True Cost of Living".
Market Expectations
EUR/USD :We expect today for the pair Euro against the U.S. dollar to decline to the target of 1.22480 then to the target of 1.21970, this declining will be start after penetration of the support level at 1.23100, and these expectations require stability of trading below the resistance level of 1.24160.
GBP/USD :The pair Sterling against the U.S. dollar completed its corrective movement yesterday at the 23.8% Fibonacci around the level of 1.45400, today we expect a decline for the pair to the target of 1.43090 then to the level of 1.42370 , these expectations require stability of trading below the 23.8% Fibonacci at 1.45400.
USD/JPY :Stochastic enters overbought areas for the pair U.S. dollar against the Japanese Yen, we expect a bearish intraday trend to the target of 91.45, stability of the level of 92.900 necessary to achieve these expectations.
Top Stories
* No headline from Eurofin meeting, euro stabilizes
* UK CPI much hotter at 3.7% prompts letter to Parliament from King
* Nikkei flat but Europe rebounds more than 1%
* Oil drops below $69/bbl
* Gold corrects to $1225/oz.
Overnight Eco
* AUD Monetary Policy Meeting Minutes
* JPY Tertiary Industry Activity -3.0% vs. -1.3%
* JPY Household Confidence 42.0 vs. 42.2
* NZD PPI Input 1.3% vs 0.5%
* EUR German ZEW Economic Sentiment 45.8 vs. 47.1
* EUR CPI 0.8% vs. 0.9%
* EUR ZEW Economic Sentiment 37.6 vs. 44.2
* EUR Trade Balance 0.6B vs. 1.7B
* GBP CPI 3.7% vs. 3.5%
* GBP RPI 5.3% vs.4.8%
Event Risk on Tap
* CAD Foreign Securities Purchases expected at 7.34B
* USD Building Permits expected at 0.68M
* USD PPI expected at 0.1%
* USD Housing Starts expected at 0.66M
Price Action
* USD/JPY recovers to 92.75 as sentiment improves
* AUD/USD remains weak at .8735 after RBA minutes suggest pause
* GBP/USD rejeceted at 1.4500 after hot CPI data
* EUR/USD stabilizes but 1.2400 level proves a challenge to hold
Risk FX finally saw a bounce in Asian and early European session today, but lack luster economic data and further selling by aggressive shorts kept a lid on the rally as EUR/USD struggled to break through the 1.2400 level while cable was repelled at 1.4500 by unexpectedly hot UK CPI numbers. Nevertheless, investor’s sentiment appeared to have stabilized with Southern European credit spreads beginning to narrow and the key Greek/German bund spread compressing below the 500bp level after EU authorized 14.9B euros to Greece for rollover of debt. One other positive factor to support the unit in overnight trade was the suggestion by Chinese academics that PBOC may increase the diversification of its reserves by taking advantage of current low EUR/USD exchange rates.
On the economic front the ZEW survey printed worse than expected at 37.6 versus 44.2 eyed, but the news was not really surprising to the market given the turbulence of the past several weeks. Although investors turned gloomier as the EZ funding crisis exploded, it will be interesting to see if manufacturer sentiment echoed the same concerns. The much more important IFO survey is due on Friday and manufacturers could prove to be more resilient in their attitude given the favorable exchange rate dynamics.
Meanwhile in UK the CPI data surprised to the upside printing at 3.7% versus 3.5% eyed which will necessitate another explanatory letter to Parliament from BoE chief Mervyn King. As we wrote earlier, “The BoE has been remarkably sanguine about the persistent price pressures within the UK economy consistently arguing that inflation will subside as the year progresses and base effects begin to disappear. However, UK now finds itself in the unenviable position of being the only G-10 economy facing persistent threat of inflation and if this dynamic does not change soon, the BoE may have no choice but to consider tightening monetary policy at a time when the country’s economy remains in a very fragile state of recovery.”
In North American session, the data focus will be on PPI and Housing starts. The market is forecasting another tepid PPI number of 0.2% and no change in the housing starts data and therefore the two releases are unlikely to have much impact on currency trading. The key today will continue to be the euro with markets carefully watching if the unit has finally stabilized after absorbing several weeks of heavy selling pressure. We have been arguing for several days that a short covering rally may be due and if the unit can retake and hold the 1.2400 figure during North American trade it may spur further short covering to the stops at 1.2500.
FX Upcoming
Currency GMT EST Release Expected Prior
CAD 12:30 8:30 CAD Foreign Securities Purchases 7.34B 6.72B
USD 12:30 8:30 USD Building Permits 0.68M 0.68M
USD 12:30 8:30 USD PPI 0.1% 0.7%
USD 12:30 8:30 USD Housing Starts 0.66M 0.63M
actually I don't know why they changed, I have never had one problem with their platform. I just hope this new change doesn't have any snags in it.
yeah I finaly got it going but I lost all files because my old platform keeps crashing. I am going to have to load every single one now sucks but works now
yep live and still not working
well this is different. they started a new platform which is supose to be more faster and efficient. I can't log into my account. I did what they said but my platform has crashed. I've never had any problems with them until this new platform thing
anyone using forex.com/uk? They suposedly have swithced to a new system. I have been waisting my time all morning trying to log into their new platform. new and improved my butt
The credit card thing was like rat poison in which it only has 10% or less poison in it. the rest is food. people thought the credit card thing was a novel idea until they fell deeper and deeper into the hole and then looked for a way out called bankruptcy.
man the euro sure is like a 8 cylinder car running on 1 cylinder right now.
what buy low sell high lol
Our Gov has designed us to be slaves to the debtor which is why we receive free credit cards daily in the mail. They give credit to one's who don't need it and the one's who fall behind who are good for it they take it away. If I don't have the cash I don't buy it unless it's a car or house.
Top Stories
* Euro tests 1.2500
* Kiwi Retail Sales disappoint
* Both Asia and Europe lower by -1.5%
* Oil at $73.65/bbl
* Gold remains at hghs $1239/oz..
Overnight Eco
* NZD Retail Sales 0.5% vs. 1.2%
Event Risk on Tap
* CAD Manufacturing Sales expected at 1.1%
* CAD New Motor Vehicle Sales expected at -3.9%
* USD Retail Sales expected at 0.3%
* USD Capacity Utilization Rate expected at 73.8%
* USD Industrial Production expected at 0.6%
* USD Prelim UoM Consumer Sentiment expected at 73.5
Price Action
* USD/JPY spikes to 93.05 but can't hod levels and drops to 92.65
* AUD/USD treads water at 89.50
* GBP/USD pressured to 1.4550 but 1.4500 holds for now
* EUR/USD short covering rally fails and 1.2500 comes into view
Euro made fresh yearly lows in mid morning European trade falling through the key 1.2500 barrier as sentiment remained extremely negative on the currency amidst fears that the planned austerity measures for Southern European economies will retard growth in H2 of 2010 for the region at large. The psychologically important level of 1.2500 proved too tempting a target for speculators hunting stops and euro’s earlier short covering rally in late Asian session quickly reversed to trigger the stop losses.
With 1.2500 erased the focus will now shift to the 2009 low of 1.2457 and the 1.2450 barrier respectively as momentum selling continues to pressure the unit lower. Still with market positioning so heavily skewed to the short side, the pair should see some sort of a short covering relief rally in the next several days, but perhaps not before taking out the 2009 lows. At present there is simply no catalyst save for profit taking for euro longs. With EU clearly in disarray the markets continue to view the single currency with suspicion and distaste.
The economic calendar was barren on the last night of trade for the week with the exception of New Zealand Retails sales which missed expectations. Retail Sales printed at 0.5% versus 1.2% eyed and cast doubt on the idea that RBNZ will start its tightening cycle in June. As we noted earlier, “Tonight’s disappointing data may have changed the dynamics of the market and if kiwi slips below .7100 further weakness could follow as bulls unwind their bets for a near term rate hike.”
Retail Sales will be the focus of North American trade as well as US data is released at 12:30 GMT. The market anticipates a decline to 0.5% from 0.9% the month earlier, but with auto sales softer in the month of April and Redbook data showing a slowdown chances are high that number could miss to the downside. USD/JPY spiked to 93.05 in early European trade but has since faded and could tumble to 92.00 given the growing move towards risk aversion in equity markets.
One of the fallouts from the EUR/USD decline is the growing possibility that global growth in the second half of 2010 may begin to slow markedly. Were that to be the case, US short term rates which have jumped over the past two months could begin to contract once again pushing USD/JPY lower as hopes of any Fed tightening fade quickly. Last week’s volatility may have ushered in a new era of caution amongst investors that could result in a prolonged move towards risk aversion in the currency market.
FX Upcoming
Currency GMT EST Release Expected Prior
CAD 12:30 8:30 CAD Manufacturing Sales 1.1% 0.1%
CAD 12:30 8:30 CAD New Motor Vehicle Sales -3.9% 8.1%
USD 12:30 8:30 USD Retail Sales 0.3% 1.9%
USD 13:15 9:15 USD Capacity Utilization Rate 73.8% 73.2%
USD 13:15 9:15 USD Industrial Production 0.6% 0.1%
USD 13:55 9:55 USD Prelim UoM Consumer Sentiment 73.5 72.2
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LOLOLOL news announces that Wall street had the biggest drop in history and it was due to a mistake by Citi bank. They pushed a B for billion instead of a M for million shares which sent Wall street tumbling lol
yeah I just saw that, he could of been a great player but his time has passed imo. He's went too long without continual proper training to keep in shape which is why he sucked at Dallas.
TN's flood recovery can be summed up by this one pic.
Here are some more pics of the devastation
http://www.boston.com/bigpicture/2010/05/flooding_in_tennessee.html