USDJPY’s bounce from 88.14 extended further to as high as 90.82. However, another fall towards 89.63 key support is still possible later today, a breakdown below this level will indicate that the downtrend from 93.75 (Jan 7 high) has resumed, then deeper decline could be seen to 87.00-87.50 area. Resistance is now at the falling trend line from 93.75 to 92.14, only a clear break above the trend line resistance could indicate that the fall from 93.75 has completed at 88.14 already.
By GCI Fx Research
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3620 level and was capped around the $1.3685 level. There are ongoing themes that are driving trading flows now. First, Greece’s fiscal problems continue to plague the common currency. Greece continues to assert that it will not require financial assistance to manage its mountain of maturing debts. If a bailout is required, the most likely candidates include Germany, the European Union, and the International Monetary Fund. Second, there is a concern that sovereign credit risks could intensify and spread to other highly indebted eurozone countries including Portugal, Italy, and Spain. The prospect of a widerning problem has kept the single currency on the defensive for weeks. Third, there is a general sense that the Federal Reserve will be more proactive about unwinding emergency credit measures than the European Central Bank. This perception has also kept the euro on the defensive. Fourth, economic data continue to be mixed. Economists note that there really is not an evident trend in the U.S. labour market yet. Data released in the U.S. today saw weekly initial jobless claims decline 6,000 to 462,000 while continuing jobless claims came in at 4.588 million, up from 4.521 million. Some private sector forecasts suggest there could be jobs growth this month as high as 300,000. The general sense is that the unemployment rate will gradually decrease, possibly falling below 9% later this year. Other data released in the U.S. today saw the January trade balance print at –US$ 37.3 billion, down from an upwardly revised US$ -39.9 billion in December. Most economists expect the mammoth U.S. trade deficit to continue widening. Tomorrow’s U.S. data will include February retail sales, mid-March University of Michigan consumer sentiment, and January business inventories. Many important data including industrial production, TICS flows, and housing numbers will be released early next week. In eurozone news, European Central Bank member Mersch said that if a European Monetary Fund is created to help address fiscal problems in the eurozone, the entity will not receive financial asssitance from the ECB. Germany’s Kiel Institute reduced its eurozone growth forecast to +0.7% for 2010 and +1.8% for 2011. Data released in the eurozone today saw the Q4 current account surplus print at €4.8 billion compared with a €32.2 billion deficit one year ago. Euro bids are cited around the US$ 1.3335 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.70 level and was supported around the ¥90.20 level. Many traders are concluding an additional quantitative easing measure by Bank of Japan next week seems like a foregone conclusion. Central bankers are known to be concerned that deflationary pressures are likely to remain in Japan through at least fiscal year 2012 and the Japanese government continues to pressure the BoJ into loosening policy further. Deputy finance minister Noda today said the BoJ and government “share the view that the economy is in a mild deflationary state.” Data released in Japan overnight saw Q4 gross domestic product rise at an annual 3.8% rate, notably less than the preliminary 4.6% figure reported last month. Also, the GDP deflation tumbled a record 3.8%, underscoring the seriousness of deflation in the Japanese economy. Demand across Asia is improving, however, and this may allow Japanese companies to increase capital expenditures. Capital spending was up 0.9% q/q in Q4 but approximately one-third of factory capacity is idle now in Japan. Japan’s fiscal situation remains critical and the government’s ability to increase fiscal spending through supplementary budgets to counter deflationary pressures is limited. Dealers continue to cite strong repatriation flows during the Australasian sessions. The Nikkei 225 stock index gained 0.96% to close at ¥10,664.95. U.S. dollar offers are cited around the ¥94.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥123.85 level and was supported around the ¥123.00 figure. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥136.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.80 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8260. Data released in China overnight saw inflation increase a significant 2.7% y/y and this has led to speculation that People’s Bank of China could hike rates or tighten policy further as early as tomorrow. The M2 money supply measure has increase more than 25% over the previous twelve months and this will invariably lead to inflationary pressures. It was also reported that Chinese banks provided CNY 700 billion in new loans last month.
₤
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5065 level and was supported around the $1.4945 level. A Bank of England quarterly inflation survey was released today in which U.K. inflation expectations climbed to their highest level since November 2008. This increase in expectations has added to speculation that interest rates could rise. Consumers now expect inflation to be 2.5% higher one year from now, up from the previous reading of 2.4%. The other big factor in the U.K. now remains the general election. Concerns that Tory leader Cameron could win the election but fail to form a majority government are weighing heavily on sterling. BoE member Posen said the U.K. economy has successfully avoided deflation and added the economy would have been considerably worse absent quantitative easing policies. Cable bids are cited around the US$ 1.4455 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the US$ 0.9060 level and was capped around the $0.9120 level.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0690 level and was capped around the CHF 1.0725 level. As expected, Swiss National Bank kept its three-month Swiss franc Libor target rate unchanged at 0.2% today. SNB reported ‘The Swiss National Bank is maintaining its expansionary monetary policy. It will act decisively to prevent an excessive appreciation of the Swiss franc against the euro.” SNB is forecasting the Swiss economy will expand about 1.5% this year. U.S. dollar offers are cited around the CHF 1.1045 level. The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4630 level while the British pound moved higher and tested offers around the CHF 1.6120 level.
Forex Daily Market Commentary provided by GCI Financial Ltd.
GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.
DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.
By Fast Brokers – The Aussie has weakened from weekly highs and its psychological .92 level after Australia’s Employment Change figure printed below analyst expectations. This couples with the pullback in Housing Loans data earlier this week and reveals the RBA’s rate hikes are having their desired impact. Hence, there’s a possibility the central bank could stand pat at its next meeting. However, China’s Industrial Production did print below analyst expectations while pricing data was relatively tame despite the cautionary headlines. As a result, China may not be as aggressive in tightening as some analysts anticipated, meaning Australia could continue to enjoy healthy demand from Asia for its commodities. Meanwhile, attention will focus in on the West with the U.S. releasing key retail sales and consumer sentiment data tomorrow. Strong U.S. consumption data could favor the risk trade and help the Aussie move higher. The Aussie did peak above our 2nd tier downtrend line, which runs through 1/18 highs, or the .9275 level. Therefore, the Aussie could have a bit more topside mobility left in the tank. The Aussie also has an apparently strong support structure for the time being considering its climb this month has been somewhat gradual.
Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/9lows, and the psychological .90 area. As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with the psychological .92 area. Additionally, previous 2010 highs could serve as a hefty technical barrier should they be tested.
Price: .9135
Resistances: .9143, .9160, .9171, .9194, .9213, .9227
Supports: .9120, .9104, .9090, .9073, .9052
Psychological: .92, 2010 highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
By Fast Brokers – The USD/JPY has pulled back from Wednesday’s highs and is gravitating towards the psychological 90 level as we anticipated. The USD/JPY has managed to avoid a retest in the process, a somewhat positive development. China’s economic data had a limited impact on the USD/JPY despite the rise in consumer prices and weakness in industrial production. Additionally, today’s U.S. data has also had a muted influence on the USD/JPY today. Therefore, it seems investors are more focused on the currency pair’s technical levels than global fundamental developments for the time being. However, that could change tomorrow with the release of America’s retail sales and consumer sentiment data. We’ve really seen the USD/JPY react to U.S. data lately. Considering U.S. consumption has a direct impact on Japan’s manufacturing base, we could see the USD/JPY come back to life tomorrow. Strong U.S. consumption could send the USD/JPY higher in anticipation that the Fed will tighten before the BoJ, whereas negative data releases could send the USD/JPY back towards its psychological 90 level. Therefore, investors should keep a sharp eye on tomorrow’s data wire.
Technically speaking, the USD/JPY faces our new downtrend lines along with intraday and 2/7 highs. Meanwhile, the highly psychological 90 area could have an influence over the USD/JPY’s movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/9 lows.
Present Price: 90.44
Resistances: 90.49, 90.54, 90.63, 90.69, 90.81, 90.89
Supports: 90.35, 90.29, 90.17, 90.11, 90.02, 89.95
Psychological: 90, March highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
03/11/10 Investors have steered clear of the US dollar this session following weak US jobless claims figures.
New York Financial Press
By Fast Brokers – The Cable has bounced back above its psychological 1.50 level after Consumer Inflation expectations came in at 2.5%, a basis point above analyst expectations. The price gains we’ve seen in the UK over the past month could keep the BoE at bay, even if the central bank has stated that the price pop is just a result of a return of the VAT. Regardless, investors are sending the Cable higher in speculation that the BoE would likely hold off any increases in QE until it is sure rising prices are a temporary affair. Keep in mind that the BoE places extra emphasis on inflation, so pricing data usually has the potential to move the Pound. The U.S. Trade Balance revealed a smaller deficit than anticipated while Unemployment Claims logged a 6k decline. The initial reaction was negative for the risk trade, though the Dollar is pulling back again as we speak. In the precious metals sector investors should keep an eye on gold. Gold has tumbled back to its psychological $1100/oz level. Though the Dollar’s correlation with gold hasn’t been reliable lately, it will be interesting to see whether this pullback forebodes a Greenback movement across the board. Attention will remain focused on the U.S. tomorrow with the release of key Retail Sales and UoM Consumer Sentiment data. Strong U.S. consumption figures could breathe some life into the risk trade. On the other hand, since the EU and UK have been mired in uncertainty lately, strong U.S. data could have the opposite effect and send investors scurrying towards the Dollar. Therefore, it will be interesting to see how the Dollar reacts tomorrow since correlations have been a bit unreliable as of late.
Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday and 3/10 lows. As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/4 highs. Our 2nd tier downtrend line could serve as a key barrier since it runs through previous March highs, or the psychological 1.52 area. Meanwhile, the psychological 1.50 area could become a technical cushion should the Cable continue to solidify above.
Present Price: 1.5023
Resistances: 1.5024, 1.5036, 1.5054, 1.5066, 1.5076, 1.5085
Supports: 1.5003, 1.4989, 1.4980, 1.4971, 1.4959
Psychological: 1.50, March highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
By Fast Brokers – Greece experienced another wave of protests today as the government looks to implement its aggressive austerity package. However, the Euro has shown little reaction to the protests since Greece is still expected to go ahead with the austerity measures despite public disapproval. Meanwhile, the EUR/USD is hold strong within its tight trading range as it stands strong above 1.35 and previous March lows. The EUR/USD has shown quite a bit of resilience over the past month considering the extent of the currency pair’s downturn during January and the beginning of February. It will be interesting to see if the EUR/USD can manage a stop side breakout from this new base over the near-term, or whether another wave of selling disables the currency pair. Overall, the longer the EUR/USD can consolidate with a slight upward trajectory, the better off the currency pair could be in the medium-term. However, we will have to wait and see how events unfold. Meanwhile, our downtrend lines are drawing nearer, meaning the EUR/USD has the potential for some accelerated topside movements should fundamentals and/or psychological cooperate. We also take note that the EUR/USD is getting closer to our 5th tier downtrend line, which runs through the 1.4550 area. Hence, this gives you an idea of the kind of topside potential the currency pair has. The EU will continue to be quiet on the data wire for the remainder of the week, meaning tomorrow’s U.S. Retail Sales and UoM releases will likely garner the spotlight.
Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/8 and 3/3 highs. Our 4th tier downtrend line could serve as a key resistance since it runs through 2/9 highs, or the 1.38 area. As we explained before, our 5th tier could also serve as a key barrier in regards to the medium-term outlook for the EUR/USD since it runs through the 1.4550 area. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/5 and 3/2 lows. Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.
Present Price: 1.3630
Resistances: 1.3637, 1.3654, 1.3672, 1.3691, 1.3713, 1.3733
Supports: 1.3618, 1.3602, 1.3579, 1.3559, 1.3542, 1.3528
Psychological: March and February Lows, 1.35
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
By CountingPips.com
The United States trade deficit decreased unexpectedly in January as imports fell at a faster pace than exports, according to a release by the Commerce Department today. The U.S. trade deficit decreased by $2.6 billion to a total international trade deficit of $37.3 billion in January following a deficit of $39.9 billion in December. Today’s trade deficit numbers surpassed the market forecasts that were expecting the deficit would rise to approximately $41.0 billion for the month.
January’s trade in goods deficit fell by $2.5 billion to a total goods deficit of $49 billion while the surplus in services rose by $0.1 billion to a total surplus of $12.1 billion.
On an annual basis, the U.S. trade deficit is $0.4 billion higher than the January 2009 level as exports have increased by 15 percent ($18.7 billion) while imports have increased 11.9 percent ($19.1 billion) annually.
Contributing to the decreased deficit level was a decline in January imports by $3.1 billion from December to a total of $180.0 billion. Imports had increased for four straight months before January’s turnaround. U.S. exports declined for the month to a total of $142.7 billion which was a decrease of $0.5 billion from December’s total.
The politically sensitive U.S. trade deficit with China edged up in January, despite the overall deficit decrease. The deficit with China rose to $18.3 billion in January from a deficit of $18.1 billion in December. Other notable U.S. trade deficits were with the European Union at $2.8 billion, Japan at $3.3 billion, Mexico at $4.6 billion, OPEC at $7.2 billion and Canada at $3.9 billion.
U.S. trade surpluses with other countries for January included Australia at $0.9 billion, Hong Kong at $1.6 billion and Belgium at $0.3 billion.
Weekly Jobless Claims fall by 6,000.
A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on March 6th. New jobless claims edged down to a total of 462,000 unemployed workers, a decline over the prior week by 6,000 workers. The jobless claims data was right in line with expectations as market forecasts predicted a fall to 460,000 jobless claims. The 4-week moving average of unemployed workers rose by 5,000 from the prior week to a total of 475,500.
Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 27th increased for the week. Continuing claims rose by 37,000 workers to a total of 4,558,000 unemployed workers. The four week moving average of continuing claims showed no change for the week to remain at 4,581,000 workers.
Forms IBcoalition.org and proposes fair industry-based alternatives to regulations
Boston, MA – March 11, 2010 – Today, a group of leading Forex Introducing Brokers (IBs) announced the formation of www.ibcoalition.org, an organization comprised of independent, regulated Forex Introducing Brokers who have joined together to challenge the proposed CFTC rules titled “Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries,” 75 FR 3282 (Jan. 20, 2010).
The main mission of the IB coalition is to suggest significant changes to the proposed CFTC regulations. The IBs currently participating in www.ibcoalition.org are ATC Brokers (NFA Member #0358522), BackBay FX (NFA Member #0388617), Currensee (NFA Member #0403251), Fast Trading Services LLC d/b/a FastBrokers.com (NFA Member #0342002), Forex On The Go, LLC (NFA Member #409594) and Gecko Financial Services, Inc. (NFA Member #0402367).
“We formed IBcoalition.org to come together as regulated IB businesses to oppose the proposed CFTC regulations that, if passed, will significantly change our businesses,” said Dave Lemont CEO Currensee. “Those of us in the IB Coalition are, we believe, the types of firms the Commission should be supporting as alternatives to the fraudulent unregistered solicitors the Commission has spent so much time and effort shutting down over the years. Unfortunately, though, in its zeal to curtail fraudulent solicitation practices, the Commission is proposing a set of rules that needlessly restrict legitimate Forex activities and will, if adopted, seriously undermine our ability to operate successfully as regulated alternatives. We welcome the opportunity to meet with the Commission and present our comments directly.”
The pending CFTC rulings propose that a Forex IB must enter into a guarantee agreement with a CFTC-regulated Forex Dealer Member (FDM), along with a requirement that the Forex IB may be a party to only one guarantee agreement at a time. By asking IBs to enter into an exclusive arrangement with only one FDM, IBs are limited in where they can refer customers, which creates a conflict of interest and is not aligned with the best interest of the customer. Independent IBs bring a valuable service to the retail trader. By carefully matching a trader’s style and needs with the right broker as it relates to spreads, trading platforms and customer service offerings, independent IBs help retail customers make the decision that’s right for them. Furthermore, these proposed rule changes are contradictory to the current CFTC policy in place for the on-exchange futures market, which allows independent IBs to introduce business to multiple Futures Commission Merchants thus enabling IBs to do what is in the best interest of their clients. The IB Coalition views the CFTC proposed rules as needlessly restricting legitimate Forex activities and capable of pushing Forex business off-shore, creating new opportunities for non-regulated or fraudulent businesses who don’t care about U.S. regulatory requirements.
The IB Coalition recently submitted a 10-page letter to the CFTC and, among other points, suggested the following changes to the proposed rulings
“As an IB, our job is to be objective and help the trader make the best decision about which broker best suits their needs,” says Stephen Leahy, President Back Bay FX. “The proposed CFTC rulings compromise the objectivity we are able to bring to our clients and completely disregards the best interest of the customer. Joining forces with the other IBs participating in IBcoalition.org is an important step in articulating our concerns both from a business and consumer-protection perspective. We welcome other IBs to join us in opposing the CFTC proposed rulings as it is currently written.”
The IB Coalition urges traders to make their voice heard by submitting their comments at www.ibcoalition.org.
About IBcoalition.org
IBcoalition.org is an organization comprised of independent, regulated Forex Introducing Brokers who have joined together to challenge the proposed CFTC rules titled “Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries,” 75 FR 3282 (Jan. 20, 2010). The main mission of the IB coalition is to suggest significant changes to the proposed CFTC regulations and a number of Introducing Brokers have already joined the group. To get more information or find out how to join, please visit www.ibcoalition.org.
For more information, please contact:
Jenna Brown
Inkhouse Media + Marketing
781.791.4558
[email protected]
Market Notes:
New Zealand’s Interest Rate has left unchanged at 2.50% as expected and the dovish comments of RBNZ had this effect and weakened the NZD.
Today we have a Swiss decision at 12:00. As a result of the recently published data it is however likely to adjust SNB’s inflation and economic outlook slightly upwards.
The final UK budget for the fiscal year 2010/11 will be presented on 24th March. Weak economic data such as yesterday’s industrial production are therefore particularly uncomfortable. As a result the period of weakness in GBP is likely to continue and the 0.9150 mark in EUR-GBP is likely to be re-challenged.
Daily Trends* & Charts
*relevant for now
| USD $ | Strong |
| EUR € | Mixed Trend |
| GBP £ | Mixed Trend |
| JPY ¥ | Strongest |
| AUD | Strong |
| NZD | Weakest |
| CAD | Weak |
| CHF | Weak |
Watch the Fundamentals!(GMT time)
| Yesterday | AU Home Loans: -7.9% vs. 2.1% exp. Chinese Trade Balance: 7.6B as exp. UK Manufacturing Production: -0.9% vs. 0.3%. NZ Interest Rate Statement: 2.50% as exp. |
| TODAY | AU Unemployment Rate: 5.3% as exp. Chinese Industrial Production: 12.8% vs. 19.5% exp. Swiss Interest Rate Statement at 13:00. Canadian Trade Balance at 13:30. US Trade Balance at 13:30. US Unemployment Claims at 13:30. NZ Retail Sales at 21:45. |
| Tomorrow | Canadian Unemployment Rate at 12:00. US Core Retail Sales at 13:30. US Consumer Sentiment at 14:55. |
Forex Market Review & Analysis by Finexo.com
Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors.
