Daily Forex EUR/USD, GBP/USD, EUR/JPY Commentary April 30, 2012
Well the BOJ did as I expected and added another 10 trillion Yen to the market, even though I had to eat a little crow with the reports. However it would seem that the market simply ate that for lunch and said can we have another. The Yen crosses bumped for all of 15 minutes and then fully retraced and as of this morning the Yen is still getting stronger across the board. Now I know I said that the effects would most likely be shorter lived this time around but I truly expected the push up to last longer than 15 minutes. I didnt trade it and glad I didnt at this point as I would have been looking for the long that never produced.
Looking at the markets this morning (the Yen crosses being the exception) it would almost seem as if risk is on. With equities rising slightly last Friday and the Euro refusing to lose any ground. The GBP/USD still on a tear. To be honest I dont believe it but the markets are not logical most of the time so we just deal with what it brings.
At this point I am expecting the chop to continue on the EUR/USD. It may be starting to roll over but like I said Friday I wont be convinced until we have a break and nice push below the hourly and 4hr 200EMAs on the chart below.
The GBP/USD is in a far different situation as it has been in a solid up trend. It is hitting some resistance from a daily break out point but it is weaker than the daily high it seemed to break rather easily on Friday of last week. At this point for both of these pairs I will be looking to trade from the extremes (highs/lows) using the intraday medium term levels and manipulation. The long term levels are fuzzy to say the least and there is no point in looking for them right now.
The pair that does look most interesting today is the EUR/JPY. I can see 2 fairly clear pushes to the downside and the gap to the lows this morning does tell me there is some more weakness there. however trading this I will want to see some correlation with the USD/JPY at least. The GBP/JPY will most likely not be in sync due to the fact the GBP/USD is acting like it is climbing Mt Everest. The gap has already closed this morning so I will be looking for some manipulation to the upside at London and be looking for the short however my bias is not so strong that I wont take a long but would be happier with the short today.
Forex News Today
European news starts the day with German Retail Sales, M3 Money Supply and Euro Zone Flash CPI figures. The more important being the German Retail sales. Having a disappointment last month and going into negative territory its expected to get slightly above at .08 but if it does drop again it will signal Germany is slowing more than expected and we may see the Euro turn. I think it may take more than that but it is possible. The CPI figures are expected to drop slightly also but since its still right around the limit for the ECB I doubt it will move the markets much with out a significant surprise drop.
Later in the US session the release of the Core PCE index from the US is due and expected to rise slightly. If it does and the US is actually starting to admit they have some inflation the chances for QE3 get further away. At the same time we get Personal Spending and a bit later the Chicago PMI numbers. The more important being the PMI which is expected to drop slightly but still be well above 50 (level indicating expansion) so with out a significant surprise to the downside I doubt this will have much impact.
A must hear podcast
I have to say I really like Chris Martenson. This guy does great research and is not afraid to tell it like it is. Below is podcast interview he does with Bill Black and they outline just how screwed up the system is and detail how it will stay that way until something major happens. Something to the effect of a revolt by the people the way I see it. Enjoy and be warned that you will probably be very angry when its done. Even though its only half of the interview.
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