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Daily FX Commentary EUR/USD, GBP/USD April 16, 2012

As I look at my charts this morning it is surly looking like I have missed the boat. I actually kind of doubt it but may not get a decent trade today seeing the EUR/USD having already dropped 60+ pips. However I would expect a pullback and manipulation as usual before it continues. I do find it odd that these lows that have been such a pain in the butt to break have given way during the Asian session but I guess weirder things have happened. Something is up and things could get interesting this week for sure.

What really got me thinking over the weekend is that the US data last week was crap and NFP the week before crap I totally expected Bernanke to give just a small hint at QE3 and he didnt even spew one small drop. Now what really kind of gets me in the craw is the fact that the market started dropping roughly 5 hours before his speech and did absolutely nothing after. Something smells here dont ya think. Oh well such as the markets and why we do our best to track these crooks rather than trade against them. I actually scoured Zero Hedge this morning for an article that showed that the Fed has sitting members that have high positions at 5 or more of the 10 largest banks but I couldnt find it or I would have a picture showing just who they are and who they work for. Sorry guys.

So where we are today is sort of in between a rock and a hard spot considering the news so we will just have to rely on the charts as usual but bare in mind what is in store. The fact is we have some bond auctions coming up and unless the ECB steps in and buys we will see some spreads widening and the Euro tanking. I am kind of thinking the ECB will step in. In the April 6th forex commentary I posted a schedule of the Moodys release of their assessment of many European banks this month. Well that has all changed over the weekend. Now this release has been put off until the beginning of May with no actual date set. This is from the Moodys website.

London, 13 April 2012 — Moody’s Investors Service today updated its timetable for concluding the reviews of Western European banks and of firms with global capital markets operations (see press releases published on 15 February 2012 “Rating Action: Moody’s reviews Ratings for European Banks” and “Moody’s Reviews Ratings for Banks and Securities Firms with Global Capital Market Operations”, available on Moody’s is taking an appropriately deliberate approach during this review process and will conclude when it is confident that all relevant information has been received and analyzed. As noted in a previous communication on March 15, the review timeline is subject to change and Moody’s intends to keep the market informed of any relevant updates.

 The next rating action is now expected to occur in early May and rating actions should, in general, follow the sequential order by system included below. Moody’s expects to conclude the reviews by the end of June.

Something tells me somebody has given Moodys a bit of a nudge to hold those off until these auctions are finished. Most likely so the ECB can step in now rather than later and try to get the yields under control  so these banks have a better chance after their downgrades. Looking at the chart posted on the 6th you will see that the release for the Italian banks were supposed to be today. And guess who has a bond auction coming up in 2 weeks? You guessed it Italy not to mention the Spanish auction on Thursday this week. So hold on to your hats guys and watch close for the manipulation because this time we will be playing with the ECB not just the 10 largest banks in the world.

There is really not much to describe with the charts at this time. The EUR/USD has broke through its lows but still has some daily support from the 14th and 15th at 1.3000 to get through. This will most likely need the London market to do but make sure you see the clear manipulation as the ECB could step in at any time.

The GBP/USD is a bit different of a story with it not breaking any recent lows due to the EUR/GBP tanking right along side the EUR/USD. However showing signs of weakness also having closed below the 4hr 200ema Friday and testing it during Asia before its small drop so far.

News Today

The scheduled news releases are light today for the EZ with just trade balance numbers from Italy and the EZ as a whole but ramp up during the US session starting with Retail Sales released along with the Empire State Manufacturing Index then TIC long term purchases a bit later. All of these are expected to decline from last month. Next is business inventories that is expected to increase the same as last month. The one that may be the bigger surprise is a Fed speech from member Pianalto. Since I am not too familiar with many of her speeches I cant make an assessment on whether she will be hawkish or dovish so just keep in mind she will be speaking at 12:30pm EST and keep a close eye on any trades you are in. It would be a good idea if you trade the US session to have your Talking Forex on also.

Happy Trading all



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