ForexLive » Mkt Talk

EUR/USD slightly easier at start of week

Gerry Davies — Mon, 15 Mar 2010 06:00:58 +0000

EUR/USD is down at 1.3737, having closed out last week in North America up around 1.3760.

The move comes amid ongoing speculation China is close to implementing further steps to rein in growth, which is weighing on Asian stocks. Morgan Stanley expects “multiple” increases in bank reserve ratio requirements and higher interest rates, starting as early as next month.

Elsewhere Sunday’s Irish Times carries comments by EU spokesman, saying euro zone has not agreed a financial support package for Greece, but that technical work is ongoing.

Very little in way of euro zone data today:

10:00 GMT: Euro zone unemployment Q4

Tail end of last week there were reports of sovereign sell interest lying around 1.3800 and these reports have been supplemented by talk of further sell interest up in the 1.3830/50 zone.

Speculative market positioning report: EUR shorts increase

Sean Lee — Mon, 15 Mar 2010 01:56:18 +0000

AUD and CAD positioning moved to overweight from neutral after a week of heavy buying. AUD long positions increased by 25%.
EUR shorts increased by 10%, to a new record level
GBP open positions were reduced by about 6% but the market remains significantly short
JPY long positions were trimmed by almost 20%

Generally speaking, the market is neutrally positioned on the USD and CHF. It is long AUD, CAD and JPY and is short EUR, GBP and NZD.

USD/CAD: support holds at 1.0155

Sean Lee — Mon, 15 Mar 2010 00:34:49 +0000

I know nothing about USD/CAD, let’s make that clear from the outset, yet I do get some good pieces of information there from time to time. I was told last week by a professional trader that if you want to be long, make sure your stops are below 1.0155. The low on Friday night was 53 I believe. It looks like this level has been vindicated, so if you are still long I’d be getting nervous below 1.0150.

EUR/USD: Sovereign sellers 1.3825/50

Sean Lee — Sun, 14 Mar 2010 22:24:00 +0000

I’m hearing that there are quite a few Sovereign offers building between 1.3825/50. The same names were heavy buyers between 1.3450/1.3550 so the offers could be similarly heavy (but I’m speculating on the size).

A tale of two MA crossovers

Jamie Coleman — Fri, 12 Mar 2010 20:43:27 +0000

Earlier in the week I got all worked up about the bullish cross in the 10 and 21 day moving averages in EUR/USD. What I failed to notice was the bearish cross in the 100 and 200 day moving averages today. I don’t know too many folks with pockets deep enough to react to slow-to-react signals like bearish crosses in very long-term moving averages but it is probably worth considering as a warning sign should the rally falter in the days ahead.

One other level to keep in mind next week is the 1.3837 level, the23.6% retracement of the 1.5142/1.3433 decline.

How high can EUR/JPY go?

Jamie Coleman — Fri, 12 Mar 2010 20:20:33 +0000

Not much above 127.00, looks like.

Remember how we spent nine months range trading between 139.00 and 127.00? My guess is it will now be very difficult to retake the 127.00 area. If we do, you’d have to surmise that happy days are here again and risk assets will remain in heavy demand.

125.25 contained this morning’s rally and needs to be overcome within the next few days before momentum stalls and traders look to book profits. Seasonals remain a headwind for EUR/JPY with year-end Japanese repatriation expected to peak in the next week or so and Dai Ichi Life floating a huge IPO on the Tokyo exchange in early April.

A move back below the 123.90 area would be our signal that the EUR/JPY rally has come to an end.

Big futures house comes to the defense of the retail forex market

Jamie Coleman — Fri, 12 Mar 2010 19:50:35 +0000

When the CFTC announced its 10-1 margin cap, some in the industry thought the CFTC was defending the futures industry by trying to force forex business onto the futures exchanges. A CEO of one of the biggest futures brokerages has come to the defense of the OTC industry, saying the regulations will only drive business off shore…

USD/JPY rebounds capped at 90.55 now

Jamie Coleman — Fri, 12 Mar 2010 19:45:55 +0000

USD/JPY has been running into steady selling at the 90.55 level throughout the afternoon the market apparently trying to trim some long ahead of the weekend. Rather than gaining momentum above the 91.00 level this morning, USD/JPY drew sellers out of the woodwork and slipped quickly back to the 90.28 level before rebounding. Model funds were said to have been the most aggressive sellers, from what we hear.

USD/JPY trades quietly now around the 90.45 level.

EUR/USD edging firmer in range, real money buys

Jamie Coleman — Fri, 12 Mar 2010 19:10:05 +0000

Dealers are pretty much just covering what floats across the desk at this point with most either satisfied with the positions they’ve got or squared up for the week. A bit of real-money buying of EUR/USD has been seen out of the trust banks this afternoon, helping give EUR/USD a lift into the mid 1.3760s. A very short-term resistance line drawn off the 1.3796 highs comes in now at 1.3771.

US mega-bank dumping USD/JPY

Jamie Coleman — Fri, 12 Mar 2010 16:57:43 +0000

Traders report a major American bank is selling USD/JPY heavily, pushing the pair from the mid-90.70s to the 90.30s.

Not a fun hour for many in the market as cable shorts get squeezed and USD/JPY longs get clubbed…

UPDATE: A model fund is now being blamed for the USD/JPY decline, through the US bank..

So much for 1.5195

Jamie Coleman — Fri, 12 Mar 2010 16:21:19 +0000

Cable has taken flight, putting the wood to shorts and filling a gap on the charts dating back to the end of February. Next resistance is at 1.5250. We been as high as 1.5117 so far.

Cable perky; Resistance at 1.5195

Jamie Coleman — Fri, 12 Mar 2010 16:11:44 +0000

Looks like cable was in demand at the 16:00 GMT fixing as it rebounded from a dip into the 1.5120s to make a new session high in the last few minutes. 1.5195 is solid resistance just over head.

Decent Aussie buying

Jamie Coleman — Fri, 12 Mar 2010 15:34:54 +0000

Traders report seeing good-sized buying of AUD/USD in the 0.9150 area but they came fairly easily, suggesting the market still sits quite long. More buying is rumored at the 16:00 GMT fixing. If we don’t rally, we could be due for a bit of a downside shake out.

We stalled earlier in the session at 0.9198 . A break below 0.9115 should trigger stops and perhaps signal a near-term AUD/USD top.

Central bank buys pullback in Cable

Jamie Coleman — Fri, 12 Mar 2010 15:20:07 +0000

Traders report a central bank has been a buyer on the most recent pullback in cable, buying in the 1.5130s.

A break back below the 1.5100 level will likely set off another round of profit-taking as disappointed longs cut-out before the weekend. We trade now at 1.5123.

Stocks turn lower; EUR losing bid

Jamie Coleman — Fri, 12 Mar 2010 15:08:14 +0000

Looks like the profit-taking ahead of the weekend has begun. EUR/USD has fallen back through 1.3736 and EUR/JPY is taking a breather after another stall ahead of 125.23.

USD/JPY is suffering a set back after ringing the register on the move up through 91.00. There had to be a nice batch of stops built up in recent days above that level…90.70/75 is first support followed by 90.20. Large stops are seen below 90.20.

EUR/USD bids are seen around 1.3705/10, traders say.

USD/JPY edges through 91.00, absorbing exporter sales

Jamie Coleman — Fri, 12 Mar 2010 15:01:02 +0000

USD/JPY has edged through the 91.00 level, absorbing solid sales from Japanese exporters. Further minor resistance lay overhead at the 91.10/15 area.

Canadian FinMin Flaherty: Always concerned by CAD “volatility”

Jamie Coleman — Fri, 12 Mar 2010 14:54:54 +0000

Canadian Finance Minister Flaherty says that he is always concerned about volatility in the CAD.

EUR/USD retesting 1.3736 area

Jamie Coleman — Fri, 12 Mar 2010 14:36:00 +0000

The old highs at 1.3736 is being tested as the combination of strong retail sales and profit-taking in EUR/JPY are pressuring EUR/USD. US equities have also opened weaker than the futures would have implied…1.3705 is next support if 1.3736 gives way.

The S&P 500 trades at 1152, +2. Futures traded up 4 points and change at their close.

Cash market open the next focus

Jamie Coleman — Fri, 12 Mar 2010 14:08:37 +0000

US equity futures are firm with the S&P’s up 4.9 points. Traders will turn their fiocus to the opening of the cash markets to see if we get follow-through buying above the 1150 resistance level in the index.

EUR/JPY is consolidating gains just below the 125.23 resistance level. A break targets the 125.75/75 level followed by very heavy resistance toward 127.00/10.

EUR/JPY gettin’ its freak on

Jamie Coleman — Fri, 12 Mar 2010 13:38:15 +0000

EUR/JPY is soaring after the US retail sales data as the “risk-on” attitude dominates the thinking in early trade after upbeat US retail sales. The February highs at 125.23 are just ticks away; Stops lie above that level.

USD/JPY is making a run at 91.00, trading as high as 90.98 on EBS so far.