Forex trading US market closed EURUSD trading

FX markets were unimpressive in the Asian session. With the US out on holiday, today's trading session is expect to also be uneventful. Coming off last week, weaker US data, China's reserve requirement increase, rumors of Chancellor Merkel's resignation, unsatisfactory answered questions surrounding Greece and JP Morgan's better earnings, but cautiously outlook had traders understandably nervous. The EURUSD finally found a temporary bottom around 1.4335, while the USDJPY ranged between 90.60 and 91.30. Treasury yields dropped along the curve, with the 2y down to 0.86%. Perhaps the highlight of Asian trading was the noticeable response to Evans-Pritchard piece in the Telegraph, which paused the EURUSD lower. The article suggested that the ECB was preparing legal grounds and framework for the secession from the monetary union. The article lacked any hard evidence but relied mainly on the author's strong reputation. However, given the stress Greece is under, policy members must be contemplating "what if " scenarios…I know we are. In New Zealand, December residential house price index disappointed at m/m -0.9% vs. 0.2% prior. Markets will now be watching CPI on Wednesday and weak import and food price data have increase the possibly of a downward surprise. The RBNZ is expected a 0.2% q/q fall, so anything lower will reinforce the view that rates will stay on hold till mid 2010. The NZDUSD failed to break 0.7450 resistance last week and further removal of yield support will put addition pressure on the kiwi. Other key data points this week will be from China, with Retail sales, GDP and IP are all expected to remain elevated. While the stronger data will be good from the global economic cycle, too much growth and inflation might make Chinese policy makers nervous, prompting an acceleration of their tightening cycle. As we have seen last week, it would be highly negative for risk collated trades (especially commodity currencies).

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Forex trading- Euro loosing ground vs pound Dollar strengthens

€ The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4365 level and was capped around the $1.4510 level.  The common currency was pressured overnight on rumours that German Chancellor Merkel may resign following a media report that she was losing the support of her coalition partners.  Merkel dismissed this talk as "absurd" and pledged to move forward with her pledge to reduce taxes.  Data released in the eurozone saw the November trade surplus print at €4.8 billion, down from €6.6 billion in October, while EMU-16 consumer price inflation rose 0.3% m/m and 0.9% y/y.  The common currency has also been pressured this week following ongoing concerns that Greece's fiscal position may require drastic intervention from the European Union.  European Central Bank President spoke after the ECB's decision to keep rates unchanged yesterday and provided a mixed assessment of the eurozone economy.  Trichet also talked up the U.S. dollar, an ongoing dialog he has had with the market that is designed to limit the amount of upside potential for euro appreciation.  In U.S. news, data released today saw December consumer price inflation up a smaller-than-expected +0.1% m/m and 2.8% y/y at the headline level and 0.1% m/m and 1.8% y/y at the core level.  Also, the January Empire State manufacturing index improved to 15.92 from a revised prior reading of 4.50.  Additionally, December industrial production printed at 0.6% and capacity utilization improved to 72.8%.  Finally, the mid-January University of Michigan consumer sentiment index receded to 72.8 from the prior reading of 72.5.   Data to be released on Tuesday include net long-term TIC flows and the NAHB housing market index.  Most Federal Reserve officials – but not all – have talked up the U.S. economy's recent strengthening and Fed officials are said to be reviewing ways to drain upwards [...]

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S&P 500 Emini Day Trading Gap Friday January 15, 2010

                                 S&P 500 Emini Futures Day Trading THE GAP

S&P 500 Emini Day Trading Gap Friday January 15, 2010

S&P Emini 500 Futures traded the day in a narrow range with below average volume.  Perhaps traders were awaiting the Intel results which reported above expectations after the market closed.  Initial after hours trading on the Emini indicated a positive response to the Intel report.  Tomorrow morning pre market  economic reports that are customarily high impact, may mitigate the good news from Intel.  Friday is also options expiration, which often lends a bullish influence to the market.  Finally, tomorrow leads into a long weekend for the market.  Markets are closed Monday for Martin Luther King Day.  Expect Friday afternoon's trading to be light.  Most of the institutional traders have already left the building by early afternoon.

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Currency trading live room US economy expanded.

Forex trading - live trade room  € The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4580 level and was supported around the $1.4455 level.  Traders are trying to digest one report that suggests the Obama administration is going to impose a major tax on banks that borrowed funds under the Troubled Asset Relief Program.  Another report suggests the Obama administration is considering extending capital gains tax relief, a move that could support the equity market.  Data released in the U.S. today saw MBA mortgage applications up 14.3% from the prior reading of 0.5%.  The Federal Reserve's Beige Book was released today and confirmed improvements in business conditions in ten of the twelve Fed districts but noted the labour market is "generally weak" in most of the Fed districts.  Data to be released in the U.S. tomorrow include the December import price index, December retail sales, weekly initial jobless claims, continuing claims, and November business inventories followed by many data on Friday including consumer price inflation, industrial production, and more.  Chicago Fed President Evans today reported the U.S. economy may expand 3%  to 5% in 2010 and sees a "stable" outlook for prices.  Philadelphia Fed President Plosser spoke overnight and hawkishly said "This increase in rates must occur well before the unemployment rate or other measures of resource slack have diminished to acceptable levels."  In eurozone news, German gross domestic product growth data confirmed the economy fell 5.0% in 2009, a sharp reversal from 2008's +1.3% expansion. This represented the first contraction in six years and the largest decline since World War II.  French data released today saw the November current account gap narrow to €3.8 billion.  European Union President Van Rompuy reported Greece's fiscal problems are a major concern the en [...]

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S&P 500 Emini Day Trading Gap Thursday January 14, 2010

                         S&P 500 Emini Futures Day Trading THE GAP

S&P 500 Emini Day Trading Gap Thursday January 14, 2010

S&P Emini 500 Futures filled yesterday's open gap on a good volume day with an above average trading range.  It seems volatility and volume are returning to the market.  Over 2 million contracts traded for the second day in a row.  The index retrace all of yesterday's decline and finished up 10 points at 1142.00.  Tomorrow will bring several high impact economic reports before the market opens.  Those reports will most likely dictate tomorrow's trading action.

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Forex trading Pound rose against dollar.

The pound rose for a fourth day against the dollar, its longest run of gains since November, after Bank of England policy maker Andrew Sentance was cited as saying interest rates may have to increase this year. The British currency also climbed versus the euro and the yen after the Guardian newspaper reported Sentance as saying the bank has done enough to stimulate the economy. The pound climbed to $1.6219 as of 8:39 a.m. in London, from $1.6164 yesterday in New York, for its longest sequence of gains since the five days through Nov. 9. It strengthened to 89.30 pence per euro, from 89.63 pence, and appreciated to 148.04 yen, from 147.06. The yen fell against all 16 of its most-traded peers tracked by Bloomberg before fourth-quarter earnings reports this week from companies including Intel Corp. and JPMorgan Chase & Co., which some analysts say will bolster stocks. Australia's dollar traded near an eight-week high against the U.S. currency on speculation a report tomorrow will show payrolls increased for a fourth month. Gold rebounded from its biggest drop in almost three weeks in London on demand for an alternative to a weaker dollar and lower prices for other commodities. Gold for immediate delivery rose as much as $6.39, or 0.6 percent, to $1,134.89 an ounce and was at $1,132.47 at 9:43 a.m. local time. Bullion for February delivery added 0.3 percent to $1,132.80 on the New York Mercantile Exchange's Comex division.

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S&P 500 Emini Day Trading Gap Wednesday January 13, 2010

                                  S&P 500 Emini Futures Day Trading THE GAP

S&P 500 Emini Day Trading Gap Wednesday January 13, 2010

S&P Emini 500 Futures gapped down 7.75 points this morning.  The gap never filled and is the first overhead gap in quite a few weeks.  Seven unfilled gaps lie beneath the current price range, and leaves open the possibility of a correction to those levels.  Today's down market on good volume is a clue as to longer term direction.   Prices are coming off of overbought conditions in all time frames.  Look for initial testing of the 1100 level if declines continue on heavy volume.  If prices turn back to the upside, look for a test of 1150.  A break above that level on volume would indicate a continuation of the up trend.  For day traders, the return of volatility to the market is welcome.

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