NordMarkets Morning FX - October 28

MORNING FX
BRIEFING
The Aussie provided the early focus in Asia with release of CPI (broadly in line with expectations) taking Aussie-dollar up from $0.9180 to $0.9208 before reversing, the move down influenced by strong sales of Aussie-yen. Trade to lows of $0.9072 attracted strong ACB demand that lifted the rate back above $0.9100 into early Europe. These sales weighed on dollar-yen to take this rate through Y91.50 ((NY low Y91.71) to Y91.07, with cross yen sales providing a heavy tone. Asian currencies lost ground to a recovering dollar with central banks seen on top to contain volatility. Euro-dollar again saw decent Asian sovereign demand, providing the main impetus to edge back above $1.4800, from lows of $1.4789, extending the recovery from NY lows at $1.4769. Cable retained a buoyant tone, holding well above Tuesday's pullback lows at $1.6311. Norges Bank in focus, with most expecting a hike of 25bps, the accompanying comments to be of more interest. German CPI state data to begin today. US durable goods and new home sales to provide afternoon interest.

EURO
Euro-dollar closed the NY session around $1.4800/05, having recovered off session lows of $1.4769 ($1.4772 50% $1.4480/1.5064) to $1.4821 ahead of the close. Rate initially squeezed down to $1.4789 before meeting ACB demand interest. This buying, along with dollar sales emanating from downside pressure on dollar-yen, acted to take rate up to session highs of $1.4828. Offers placed ahead of $1.4830 kept the rate capped into Europe, the break above into the session allowing it to edge on to $1.4840. Rate currently trades around $1.4830. Offers seen placed between $1.4840/50, a break above to open a move toward $1.4865/70 ahead of $1.4900, though one Asian trader has noted that funds have been more than willing to sell into the ACB inspired recovery. Support now seen back toward $1.4800, with stronger interest noted between $1.4770/60. A break here to $1.4740 with stops placed on a break below. Further demand $1.4725 with talk of short entry sell orders placed on a break below. One trader has suggested that the break of $1.4760 exposes $1.4680.

The euro sees a bear-cross in the daily Stochastic study and another potential cross on 10-day momentum as the pair attempts to sustain a break of the 21-DMA at $1.4825 to turns bear's focus to Fibonacci retracements at $1.4772 and $1.4703. Bulls now need a break above $1.5060/64 to get back in control, although initial resistance is $1.4905/30.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5080/10 Top of the daily Bollinger band, 1% MAE
RES 2: $1.5060/64 Potential double-day high 23, 26 Oct
RES 1: $1.4905 5-day moving average

CURRENT LEVEL: $1.4812

SUP 1: $1.4769 Low 27 Oct, 1% moving average envelope
SUP 2: $1.4772 50% retracement of the October advance
SUP 3: $1.4703 61.8% retracement of the October advance
SUP 4: $1.4625 2% moving average envelope


YEN
Dollar-yen closed a muted US session Tuesday around the Y91.80 level, with euro-yen again under sell pressure, slipping to Y135.66 and closing just off the lows. Early Asian demand for yen crosses proved to be temporary as exporters sold Aussie-yen in particular, taking dollar-yen back from Y91.81 to trigger stops through Y91.50. Model funds were euro-yen sellers as stops were hit in this pair through Y135.45 down to initial lows near Y135.20. Subsequent bounces were short-lived, dollar-yen extending the lows down to Y91.07 into the Asian afternoon as euro-yen dropped down to Y134.84. Traders noted strong Japanese data adding fuel for yen bulls as retail trade came in at +0.9% m/m, with the y/y rate at -1.4% versus -1.8% previous. European dealing opens with dollar-yen climbing back towards Y91.40, traders now seeing decent-sized stops building on a break below Y91.00, while techs note the failure to hold within the Ichimoku Cloud yesterday. Bids seen coming in around the Y90.80 area, while light offers are at Y91.50, more at Y91.80 and Y92.30/50.

The daily stochastic is poised for a bear-cross in dollar-yen as the market pulls back. However, the market remains above the base of October's rising channel at Y90.51. Initial support is the Tenkan line of the Ichimoku cloud at Y90.80, while initial resistance is at the 5-day moving average at Y91.75 and the Y92.32 high. Euro-yen has pulled back after testing the bull-flag target and the daily stochastic is now seeing a bear-cross. Main Fibonacci levels are Y134.90, which is coming under pressure, and Y133.80, which matches Ichimoku levels and moving average level. Initial resistance is the Tenkan line of the Ichimoku cloud, at Y136.00 and 5-DMA at Y136.80.

RES 4: Y94.00/05 Ichimoku Cloud top, 61.8% retracement of Aug/Oct decl
RES 3: Y93.30 High 7 Sep, 100-day moving average
RES 2: Y92.90 50% retracement of Aug/Oct decline
RES 1: Y92.53/64 Failure high 21 Sept, Projected channel top from 8 Oct

CURRENT LEVEL: Y91.16

SUP 1: Y90.51/68 Support line 8 Oct, 38.2% of October rally
SUP 2: Y90.15/25 Kijun & 21-day moving average
SUP 3: Y90.09/17 Low 20 Oct, 50% of October rally
SUP 4: Y89.66 61.8% retracement of October rally


CABLE
Opened Asia around $1.6378 with rate influenced by the early CPI react rally in Aussie, edging to an early high of $1.6406.Rate reversed off highs, the move down seen in line with Aussie as both Aussie-yen and sterling-yen came under pressure out of Tokyo, cable pressed to lows of $1.6338, though traders reported that sterling continues to enjoy an underlying buoyant tone, though just off recent pullback lows of $1.6251, seen after last Friday's release of poor UK GDP. Cable bounced between $1.6330/35 and $1.6380/85 through the balance of the session, currently trading around $1.6370 in early European dealing. Offers remain in place between $1.6380/85,a break above to open a move back toward $1.6400/05. Support $1.6335/30, a break to allow for a retest of Tuesday's pullback area between $1.6315/10 ahead of $1.6295/85 area. Stops noted below $1.6280, which if tripped to expose recent pullback lows of $1.6251, with bids seen to $1.6250.

The bearish engulfing pattern in cable as well as the bear-cross in the stochastic turned bear's attention to Fibonacci retracements of the $1.5708 to $1.6694 rally from $1.6201 and the $1.6115/60 support area, which starts with the 21-DMA. While $1.6251 remains the low, upside retracements are $1.6474, $1.6526. Euro-sterling is pulling back further from the 21-DMA but signals from daily studies are not convincing, with the stochastic and momentum studies bouncing along the lows.

RES 4: $1.6726/40 76.4% retracement of $1.7041-$1.5708, High 11 Sep
RES 3: $1.6680/95 Current top of the daily Bollinger band, High 23 Oct
RES 2: $1.6526 61.8% retracement
RES 1: $1.6440/73 Hourly high, 50% of 23 Oct decline

CURRENT LEVEL: $1.6361

SUP 1: $1.6240 Low 19 Oct
SUP 2: $1.6201 50% retracement of the October recovery
SUP 3: $1.6160 21-day moving average
SUP 4: $1.6115/34 High 8 Oct, Low 1 Sep, Spike 30 Sep, Low 21 Sep



MORE
Dec Bunds opened down 2 ticks Wednesday at 121.50, but reversed direction after strong gains towards the Chicago close after stellar 2-year Note auction and stronger than expected Australia CPI data. Focus is on supply from Germany, which includes re-opening of the 2.5% Oct 2014 Bobl 155 and 1.75% Apr 2020 BUNDei issue for combined size of E7.0bln. US sells $41.0bln 5-year Note auction. Also eyed is German state CPI data and Norges Bank is set to become the first European central bank to pull the rate hike trigger by 25bps to 1.50%.

DAILY CALENDAR
European data for Wednesday started at 0700GMT with German import prices, which fell 0.9% on the month in September, bringing the annual change to -11.0%. Energy costs fell back 5.7% on the month and plummeted 38.1% year-over-year. Export prices declined 0.1%, leaving the annual fall at 3.2%.

This is followed at 0830GMT by the Italian ISAE business survey. At 0900GMT, the ECB is due to publish the Euro area bank lending survey. Also in Europe today, the flash German HICP data for October is due after all the states have reported, with forecasts of unchanged m/m, -0.2% y/y.

In the UK, September Land Registry House Prices are due, at 1100GMT. US data starts at 1100GMT with the weekly MBA Mortgage Application Index, which is followed by Durable Goods Orders at 1230GMT, which are expected to rise 1.5% in September after the revised 2.6% drop in August. Boeing reported 20 orders in September, down from the 32 reported in August.

In Norway, the Norges Bank announces its monetary policy decision at 1300GMT, which is followed by a press conference. Overall, the market is looking for a 25bps hike to 1.50%, although there is a chance of a 50bps rate hike. One leading reason deterring a 50bps move is the recent Nok strength. The focus is also on the Monetary Policy Report and, in particular, the new projected path of policy rates to gauge how much more rate hikes will be likely into 2010. All in all, the Norges Bank is seen as likely to be the first European central bank to pull the rate hike trigger.

US data continues at 1400GMT, when new home sales are expected to rise further to a 440,000 annual rate in September after rising modestly in August to the strongest pace in nearly a year.

This is followed at 1430GMT by the weekly Crude Oil Stocks data.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 23

MORNING FX

BRIEFING
The Positive close on Wall Street, the Dow closing back above 10,000 again, led to gains in Asian equity markets as risk trades gained further favour to the detriment of the dollar and yen. Euro-dollar extended recent gains, pushing through the $1.5050 barrier level to $1.5061 before meeting ACB supply which eased it back to $1.5025/20 before marking lows ahead of the european open at $1.5012. Strong demand for sterling-yen saw rate trip stops through Y152.00/25, the buying seen as the main driver as dollar-yen broke above Y91.50 to Y91.73, the rate remaining buoyed above Y91.50 ahead of the European open. Euro-yen stops were triggered above Y137.60 taking rate to Y137.83. Cable was able to extend its recent gains, breaking above $1.6638 to $1.6679. Dollar was able to pare back some of its early losses as traders reacted to media reports, Fed officials are trying to soften the guidance of future statements (especially the line 'extended period'), Fed Plosser affirming he is probably the only FOMC member willing to hike. EZ PMI's, Germany IFO and UK GDP the early focus.

EURO
Euro-dollar opened Asia around $1.5030, off NY late recovery highs of $1.5040 seen as market reacted to the rally on Wall Street. Rate initially struggled to move above $1.5030 in early trade before strong demand emerged ahead of the Tokyo fix that was able to take it through recent highs at $1.5047, triggering the reported barrier at $1.5050 before running into decent supply above $1.5060 from an Asian sovereign that capped the move at $1.5061. Rate eased lower after the fix, the rate finding initial support at $1.5025/20 before extending the pullback to $1.5012 ahead of the European open. Recovery to $1.5025 into early Europe met renewed sell interest which has eased rate back to retest the overnight lows at writing. Demand interest seen placed from around the Asian base through to $1.5000, a break to allow for a deeper move toward $1.4985/80 ($1.4988 61.8% $1.4943/1.5061) ahead of $1.4950/40. Resistance remains above $1.5060, with further interest noted between $1.5080/85 ahead of $1.5100 with area between $1.5130/40 seen providing strong tech resistance.

The euro remains in it's rising October channel of $1.4952/1.5170 as daily studies reach stretched levels and risk a bear-cross. The pair also remains within the Bollinger band and 1% MAE, which are both rising targets at $1.5055/75. Initial support is the 5-day moving average at $1.4990.

RES 4: $1.5170 Top of October channel
RES 3: $1.5163 76.4% of $1.6039 to $1.2329
RES 2: $1.5090/10 Top of the daily Bollinger band, 1% MAE
RES 1: $1.5047 High 21 Oct

CURRENT LEVEL: $1.5013

SUP 1: $1.4952 Support line from 2 Oct
SUP 2: $1.4845 High 23 Sep
SUP 3: $1.4780/90 1% moving average envelope, 21-day moving average
SUP 4: $1.4480 Low 2 Oct, Base of Bollinger band




YEN
After extending October highs to Y91.71 in the US session Thursday, dollar-yen eased back to close the day around Y91.30. while euro-yen retained a buoyant tone following the move to two-month highs at Y137.43. Traders said sterling-yen demand dominated flows in the Asian session as the cross took out stops above Y152.00/25. A few dollar-yen stops were cleared on the move through Y91.50, with the rate then moving on to challenge Thursday's highs, this time stalling at Y91.73, with subsequent dips contained around the Y91.50 area into the Asian afternoon. Euro-yen followed a similar path, triggering stops on the break of Thursday's highs en-route to a fresh two-month peak at Y137.83 before stalling in line with the August 13 spike high, with dips so far contained ahead of Y137.50 into the European open. A break of the highs in the cross seen exposing the August peak in the Y138.70 area, while stops are seen through Y138.05. Dollar-yen offers eyed at Y91.90/92.00, with techs seeing the 55-day moving average as next resistance at Y91.92.

Recovery above the 21-DMA at Y90.00 encouraged bulls to finally exceed the Y91.75 Fibonacci level and improve the outlook further. Daily studies are in overbought territory but still pointing higher.

RES 4: Y93.50 100-day moving average
RES 3: Y92.90 50% retracement of Aug/Oct decline
RES 2: Y92.53 Failure high 21 Sept, Ichimoku Cloud base
RES 1: Y91.90 55-day moving average

CURRENT LEVEL: Y91.86

SUP 1: Y90.25 Kijun & Tenkan line of the Ichimoku cloud
SUP 2: Y90.00 Minor support line, 21-DMA
SUP 3: Y88.83 Low 14 Oct
SUP 4: Y88.01 Low 7 Oct




CABLE
Opened in Asia around $1.6610 and initially eased off to mark lows at $1.6585 before lifting back above the figure, the move boosted by reported US name buying with reported large stops above $1.6650 seen as the early target. However, rate again met resistance at the NY high of $1.6638. Rate then drifted lower, moving in tandem with euro-dollar as risk positions were pared back following the release of inline China data as well as an easing in commodity currencies on weak talk linking the move to Galleon unwind needs. Rate dipped back under $1.6600 to $1.6595, recovering to $1.6625 ahead of the European open before dropping back to $1.6580 as early Europe bought dollars. Cable currently trades around $1.6598 and edging higher at writing. Offers seen placed between $1.6620/25, more around the rally highs at $1.6638, with interest said to extend toward $1.6650 with those mentioned stops above. One trader suggests area above $1.6650 could prove messy, though another on has reported Mid East and Sovereign interest positioned between $1.6640/60.

Cable continues to extend ground, supported by daily studies, but is testing the top of the daily Bollinger band at $1.6680, which will encourage profit-taking. Momentum is also fading, sending a warning to the bulls. Main resistance levels are $1.6726/40 and the 6 Aug high of $1.7041.

RES 4: $1.7041 High 6 Aug
RES 3: $1.6740 High 11 Sep
RES 2: $1.6726 76.4% retracement of $1.7041-$1.5708
RES 1: $1.6675/80 Hourly highs, top of daily Bollinger band

CURRENT LEVEL: $1.6628

SUP 1: $1.6530 5-day moving average
SUP 2: $1.6360 100-day moving average
SUP 3: $1.6240 Low 19 Oct
SUP 4: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sep





OPTIONS AND MORE
FX Option expiries for today's 1400GMT cut,

* Euro-dollar; $1.5000, $1.4925, $1.4920, $1.4900, $1.5100
* Dollar-yen; Y92.50, Y91.50, Y91.25, Y91.00, Y90.00
* Aussie; $0.9300
* Dollar-Canada; C$1.0430

Elsewhere, Japan's benchmark stock indices ended Friday's session mixed, closing at or near the session lows. The Nikkei 225 was higher by 15.82 points, or 0.15%, to stand at 10282.99, while the broader-based TOPIX was 6.57 points lower at 902.03. Volume for the Nikkei constituents totalled a preliminary 1.304 bln shares, with 96 issues trading higher, 113 lower and 16 unchanged.

DAILY CALENDAR
Data already out showed sales at John Lewis UK department stores rose 13.0% in the week to October 17 compared with the comparable week a year earlier, the John Lewis Partnership announced Friday. However, Lewis caution that the figures, although good, are again in comparison to the same week in 2008 - "the height of last year's finance sector turmoil." Total partnership sales in the same week were higher by 13.8% year-on-year on the comparable week in the 2008-09 trading year, Lewis stated. Meanwhile, total sales at the Waitrose food chain were higher, rising by 14.3% compared to the same week a year ago.

European data continues at 0600GMT with German construction orders for August, followed at 0645GMT by French consumer spending.

This morning also sees the flash manufacturing and services PMIs from the main European states, with Germany at 0627 expected to come in at 50.5 and 52.5, France at 0657GMT expected to come in at 53.0 and 53.9, and the main EMU data at 0757GMT expected to come in at the 50.0 mark (after 49.3) and 51.4 (after 50.9).

European data continues with the 0800GMT release of the october German IFO business sentiment data, which is expected to improve to a reading of 92.1 from 91.3.

After posting its largest gain since July 1996 in August, the index rose by just 0.8-points in September. Nevertheless, September marked the sixth successive month of increase from March's series low and the index already sits at its highest level since September 2008.

Today is expected to see small rises in both the current assessment and expectations components. The ZEW survey of investors, which can be a good indicator of the Ifo, posted a surprise decline in October.

However, while the ZEW index has now almost recouped most of the recession-related losses, the Ifo appears to still have more potential to move higher. Indeed, while the ZEW expectations index is more than 29 points above its long-run average, the equivalent Ifo indicator is still just below its historical average.

UK data sees the 0800GMT release of SMMT Car Production, followed at 0830GMT by BBA Loans For House Purchase, the first estimate of Q3 GDP and also the latest Index of Services data.

Further core-European data at 0900GMT sees EMU Sep industrial new orders, which are expected to come in at 1.5% m/m, -22.5% y/y.

The highly anticipated first estimate of Q3 GDP will reveal whether or not the UK has technically come out of recession and is expected to show a gain of 0.2% q/q to see growth returning to the UK economy at a very anaemic pace following five quarters of contraction. Yet forward looking survey indicators suggest that the third quarter should see the economy returning to growth at a more healthier pace with the services PMI averaging well above the 50-mark in Q3 at 54.2. However, this should come with a health warning given that the relationship between the PMI data and official GDP figures has been somewhat looser during the credit crunch. Should the UK economy fail to grow, however, this would make it not only the deepest but also the longest post-war recession.

In the US, the Boston Fed's Cape Cod conference in Chatham, Mass. continues. Today, at 1230GMT, Fed Chairman Ben Bernanke delivers a speech on the supervisory landscape there, with an audience Q&A session expected to follow.

US data sees the 1400GMT release of Existing Home Sales, which are expected to rise to a 5.35 million annual rate in September after falling in August.

At 1530GMT, Fed Vice Chairman Donald Kohn participates in a panel discussion on international perspectives at the Boston Fed's conference.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 20

MORNING FX

BRIEFING
The dollar remained under pressure into early Asian trade with risk trades boosted by After the Bell releases from Apple and Texas Instruments, the strong earnings data providing a lift for US index futures and Asian equities. Last night's meeting of Eurogroup finance ministers in Luxembourg seemed to show an absence of concern about the euro's strength, at least publicly, which was seen adding to euro demand into early Asia. Euro-dollar was the main focus in a will it, won't it break $1.5000, the move up posting highs at $1.4994 before meeting strong offers stacked toward the figure which prevented further upside progress. RBA Minutes reflected RBA Stevens' hawkish tone from last week and provided a lift above $0.9300 for the Aussie, only to meet strong supply that restricted upmove at $0.9310. A major Japanese name cited for taking dollar-yen down from Y90.75 to Y90.35, with further sales taking it on to Y90.08. Asian central banks were active overnight buying dollar-Asia with expectation of balancing to be seen into Europe. Dollar remains soft into Europe with focus remaining on $1.5000.

EURO
Euro-dollar opened Asia around $1.4958, the release of strong earnings reports from Apple and Texas Instruments After the Bell, as well as no major concern voiced over the strength of the euro out of last night's meeting of EU-16 FinMins, prompted strong demand for euro-dollar, the buying able to push rate through the NY high at $1.4967, breaking into fresh 14 month highs above $1.4968, with stops triggered on the break of $1.4975 to take it on to an initial high of $1.4980. A UK clearer sold it back to $1.4960/55 before rate picked up fresh demand into the afternoon session, the buying extending the rally to $1.4994 before meeting strong offers, reportedly stacked toward the much reported barrier level at $1.5000. Traders did note that a major Japanese name was a stand out seller ahead of the figure. Rate then settled back into a $1.4965/85 range ahead of the European open, currently trading around $1.4970. Offers remain in place to $1.5000, with talk of a mix of offers and stops placed between $1.5005/10. Support seen at $1.4965 through to $1.4950, stronger at $1.4920 and $1.4880/70.

The euro is edging above the recent double top to score new highs, although the daily studies are reaching very stretched levels and momentum is fading. Overall trend is clearly firm, however, and the pair remains within the Bollinger band and 1% MAE, which are both rising targets at $1.5010/20, as well as within the rising October channel of $1.4862/1.5079.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5155 2.0% moving average envelope
RES 2: $1.5079 Top of October channel
RES 1: $1.5010/20 Top of the daily Bollinger band, 1% MAE

CURRENT LEVEL: $1.4977

SUP 1: $1.4862 Support line, High 23 Sep
SUP 2: $1.4750 21-day moving average
SUP 3: $1.4700 1% moving average envelope
SUP 4: $1.4480 Low 2 Oct, Base of Bollinger band


YEN
Dollar-yen closed the US session Monday towards the bottom-end of the range around Y90.55, while euro-yen ended around earlier Asian opening levels at Y135.50. Early highs were notched into the Asian session at Y90.80 and Y135.84 before both pairs came lower, largely on the back of dollar-yen supply coming from a major Japanese name which knocked the pair down to initial lows at Y90.35. Euro-yen meanwhile fell back to Y135.20, subsequent bounces relatively limited in both pairs before fresh lows were hit into the Asian afternoon at Y90.08 and Y134.87. Toushin interest is on the radar for Wednesday, as a Japanese investment house is scheduled to issue approximately Y1.2trn of fresh funds, said to primarily be made up of Brazil, South Africa and Australia. Dollar-yen trading around Y90.20 into the European session, traders now seeing bids into Y90.00 where large expiry interest is again noted for the NY cut today. Techs see the 21-day moving average as key at Y89.93. Offers are back at Y90.40/60 in small, stronger at and above Y91.00. Euro-yen supply still seen into Y136.00/10 with stops above.

Dollar-yen put in a short-term base following bounce ahead of key support levels at Y87.12, while recovery above the 21-DMA at Y89.90 also encouraged bulls to target the Y91.75 Fibonacci level. However, daily studies are fading and while Y91.33 remains the near-term High, Fibonacci levels are at Y90.06, Y89.67 and Y89.27. The daily studies remain bullish in euro-yen, although are starting to look stretched as the cross holds over resistance at The move now risks stalling at the 24 Aug high of Y136.08.

RES 4: Y92.90 50% retracement of Aug/Oct decline
RES 3: Y92.53 Failure high 21 Sept
RES 2: Y91.75 38.2% retracement of Aug/Oct decline
RES 1: Y91.33 High 16 Oct

CURRENT LEVEL: Y90.16

SUP 1: Y89.90 21-day moving average
SUP 2: Y89.50/60 Minor support line, Tenkan line of Ichimoku cloud
SUP 3: Y88.83 Low 14 Oct
SUP 4: Y88.01 Low 7 Oct


STERLING
Cable opened Asia around $1.6395 and pushed to retest NY highs at $1.6425 as the dollar came under early pressure into the session. Rate failed to break above on this initial attempt, dropping back below the figure only to meet strong demand at $1.6375 that provided the overnight base. Rate edged back, pivoting the figure for the balance of the overnight session before early Europe provided renewed demand interest to take it above the overnight high. Triggered stops added to the upside momentum to take it on to $1.6447, with reported offers ahead of $1.6450 above to counter. Rate currently seen resting on the broken resistance at $1.6425, with bid interest seen placed to $1.6420. A break here to allow for a deeper pullback toward $1.6505/395 with stronger interest remaining in place at $1.6375. Above $1.6450 to open a move toward $1.6470/80 ahead of $1.6500.

Cable continues to extend ground above the 21-DMA and holds above initial support of $1.6300/1,6240. Daily studies remain firm for now with the stochastic pushing into overbought territory but below historic highs. The move is now testing the top of the Bollinger band as well as a resistance line from 6 Aug, which coincide at $1.6438. Euro-sterling backed away from the top of the daily Bollinger band and subsequently crashed through the 21-DMA, which turns initial resistance with the 5-DMA at stg0.9165/90. Studies are negative and now gaining momentum, encouraging bears to target Fibonacci levels at stg0.9047/58.

RES 4: $1.6740 High 11 Sep
RES 3: $1.6532 61.8% retracement of $1.7041-$1.5708
RES 2: $1.6467 High 23 Sep
RES 1: $1.6438 Resistance line from Aug 6, Top of daily Bollinger band

CURRENT LEVEL: $1.6405

SUP 1: $1.6300 5-day moving average
SUP 2: $1.6240 Low 19 Oct
SUP 3: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sep
SUP 4: $1.6050 21-day moving average



OPTIONS AND MORE
FX Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.5000, $1.5300. Exotic; $1.5000 KO
* Dollar-yen; Y90.00(lge), Y89.75, Y90.60
* Aussie; $0.9300
* Dollar-Canada; C$1.0300, C$1.0250, C$1.0450

Elsewhere, Japan's benchmark stock indices ended Tuesday's session higher, boosted by overnight gains in the US. The Nikkei 225 was higher by 100.33 points, or 0.98%, to stand at 10336.84, while the broader-based TOPIX was 7.65 points higher at 913.45. Volume for the Nikkei constituents totalled a preliminary 1.229 bln shares, with 150 issues trading higher, 52 lower and 23 unchanged.

DAILY CALENDAR
European data for Tuesday started at 0600GMT, showing German producer prices fell 0.5% between August and September, leaving the annual change at -7.6%. Excluding energy prices, which fell 1.7% on the month and 16.4% on the year, PPI was unchanged month-over-month and down 3.3% in the year to September.

There is a slew of UK data at 0830GMT, including Provisional M4 Money Supply, the September public finances report , BoE capital issuance data and also CML Gross Mortgage Lending, also for September.

US data starts at 1145GMT with the weekly ICSC-Goldman Store Sales data, which is followed at 1230GMT by Housing Starts, Building Permits and the Sep Producer Price Index.

Producer prices are expected to fall 0.3% in September. Analysts expect a decline in energy prices following the sharp movements in recent months. Gasoline pump prices were reported down slightly. Core PPI is expected to rise 0.1%.

Housing starts are expected to rise to a 615,000 annual rate in September, as builders have now found inventory levels more tolerable.

US data continues at 1255GMT with the weekly Redbook Average. The Bank of Canada Interest Rate Announcement is then due at 1300GMT.

Later on, at 1915GMT, the Bank of England's King speaks in Edinburgh.

Late US data sees the 2100GMT release of the weekly ABC News Survey, while at midnightGMT Tuesday night, Philadelphia Fed President Charles Plosser delivers a speech on monetary policy in a tough environment to the Standford Institute for Economic Policy Research in Palo Alto, California.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 19

MORNING FX

BRIEFING
Weekend press reports provided the main trading influence into early Asian trade Monday, ITEM Club report suggesting sterling would remain close to parity with the euro for up to 4 years weighed on the pound, article in the AFR that recent comments from RBA Stevens had been misinterpreted and next rate decision in Australia still data dependent knocked Aussie lower. WSJ report 'Euro strength is worrisome' noting that today's Luxembourg meeting of EU-16 FinMins is likely to talk about recent euro strength (ECB Trichet also due to travel to China before year end) helped weigh on the euro. Euro-dollar dropped to initial lows of $1.4829 before demand emerged ahead of stops at $1.4825 to correct it back to $1.4890, cable dropped to $1.6281 but release of positive Rightmove housing data allowed it to recover to $1.6371, filling the gap from NY's close before BOE Posen comments on support for QE extension knocked it lower again. Dollar-yen was basically sidelined, pivoting Y91.00. Main forex driver remains interest rates/time table of exit strategies for liquidity provisions.

EURO
Euro-dollar opened Asia around $1.4893 and initially edged to session highs of $1.4920 before reversing, the move down gaining momentum as a black-box fund provided added weight to take it through $1.4880, with triggered stops below $1.4850 and $1.4835 taking it to lows of $1.4829. Euro managed to recover, the recovery aided by euro-yen demand, taking the rate to $1.4890 ahead of the European open. The late rally saw early Europe sell back into the move, with a WSJ report further highlighting today's Luxembourg meeting of EU-16 FinMin's that currency strength will likely be discussed, the rate easing back to $1.4870, currently around $1.4880. Bids remain in place at $1.4870 (38.2% $1.4829/93), a break to allow for a deeper move toward $1.4855/45 ahead of $1.4829. Bids seen placed between $1.4830/25 with overnight talk mentioning stops placed on a break of $1.4825. A break here exposes next support at $1.4800, with more stops noted below $1.4795. Offers $1.4890/00, $1.4920-30/35 with stronger interest placed between $1.4960/70.

Potential double-day high at $1.4968, sets up risk of a reversal lower, especially as this level represented the near-term upside bull-flag objective and also the capped topside in November 2007. The dailt stochastic remains firm, but while $1.4968 defines the high, near-term Fibonacci levels are $1.4781, $1.4724 and $1.4666.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5130 2.0% moving average envelope
RES 2: $1.5059 Top of October channel
RES 1: $1.4968/72 Double-top, Major high Nov 2007, Bull flag

CURRENT LEVEL: $1.4899

SUP 1: $1.4844 Support line, High 23 Sep
SUP 2: $1.4735 21-day moving average
SUP 3: $1.4500 Base of Bollinger band
SUP 4: $1.4480 Low 2 Oct


YEN
After extending October highs to Y91.33 in the NY session Friday, dollar-yen eased back to close around Y90.93, while euro-yen ended with decent gains on the week around Y135.50. Data released in Japan Monday showed the August Tertiary Index rising 0.3% versus 0.6% in July, slightly better than market expectations, while the minutes of the latest BoJ decision were released with no surprises. Dollar-yen hit early highs at Y91.15 in Asia as euro-yen topped out at Y135.91, both pairs then coming lower into the fix, dollar-yen easing back below Y90.80 as the cross dropped to Y134.76. Balance of the session was fairly subdued as dollar-yen struggled to regain the Y91 handle, slipping back to post late lows at Y90.73, while euro-yen held between Y135.00/20. Bids reported below Y90.60 from US accounts, while exporter supply is now placed at and above Y91.00 with stops said to come in on a break of Y91.25. Euro-yen still holding above the Ichimoku Cloud following last week's topside break, offers seen at Y136.00/10, ahead of resistance at Y136.44 (76.4% August-October sell-off).

Dollar-yen has put in a short-term base following bounce ahead of key support levels at Y87.12 -- the Dec/Jan low and Y87.44/51, where former is channel base from May 22 and latter a trend line from April 1995. In addition, the break above the 21-DMA at Y90.05 was also encouraging and close above will encourage bulls to target Y91.75 Fibonacci level.

RES 4: Y92.90 50% retracement of Aug/Oct decline
RES 3: Y92.53 Failure high 21 Sept
RES 2: Y91.75 38.2% retracement of Aug/Oct decline
RES 1: Y91.33 High 16 Oct

CURRENT LEVEL: Y90.62

SUP 1: Y90.44 High 12 Oct
SUP 2: Y90.05/25 5, 21-day moving average & Kijun line
SUP 3: Y89.60 Tenkan line of Ichimoku cloud
SUP 4: Y88.01 Low 7 Oct


STERLING
Gapped from the NY closing level around $1.6355 to an opening low at $1.6281 as early Wellington traders marked the rate lower on the back of the weekend ITEM Club report suggesting sterling would hold close to parity with the euro for up to 4 years. Rate reversed off of the early lows into Tokyo trade with demand for sterling-yen lifting the rate to a high of $1.6371, the move filling the gap. Cable drifted lower again, the move down gaining momentum as market then reacted to reported comments from BOE Posen that he would support further QE extension. Cable dropped back to retest earlier lows before again picking up demand interest on the dip, the rate edging back to $1.6340/45. Fresh sales emerged into early Europe to correct it back to $1.6285, snapping back to $1.6320/25 before settling above the figure. Sterling's underlying positive recovery tone said to remain in place, with Barclays suggesting that the pound is vulnerable more to upside data surprises. Support seen at $1.6285/80, stops noted $1.6280/75. A break exposes $1.6255/50. Offers $1.6320/25, $1.6340/50, $1.6370/80.

Cable broke and closed over the 21-DMA for the first time since Sep 17 with the move supported by bullish daily studies and a bull-cross of the 5 & 21-DMAs. The move is now testing the top of the Bollinger band and is stalling around the 100-DMA of $1.6350, which may encourage further profit-taking. Initial support is the 5-DMA at $1.6180

RES 4: $1.6740 High 11 Sep
RES 3: $1.6532 61.8% retracement of $1.7041-$1.5708
RES 2: $1.6449/67 Resistance line from Aug 6, High 23 Sep
RES 1: $1.6415 Top of the daily Bollinger band

CURRENT LEVEL: $1.6308

SUP 1: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sep
SUP 2: $1.6040 21-day moving average
SUP 3: $1.5708/21 Low 13 Oct, High Dec 2008 & 50.0% of $1.44 advance
SUP 4: $1.5660/88 Daily Bollinger band base, 38.2% of $1.3500 to $1.7041



OPTIONS AND MORE
FX Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.4900, $1.4980, $1.5000
* Dollar-yen; Y90.20, Y90.00
* Euro-yen; Y131.45, Y131.30
* Cable; $1.6000
* Sterling-yen; Y140.50
* Aussie; $0.9100

In terms of European government bond issuance this week, it decreases dramatically compared to last week and is due from Ireland and Slovakia -- total E1.15bln vs E29.5bln last week. Slovakia is due auction the 4.50% May 2026 SLOVGB series 206 bond on Monday for E100-200mln. The Ireland National Treasury Management Agency (NTMA) is due sell between E750mln to E1.0 billion of the the 3.90% Mar 2012 IGB and 4.60% Apr 2016 IGB issues on Tuesday. However, supply is outweighed by reinvestment flows, with no redemption and coupon payments from Greece E1.0bln, Austria E0.5bln, Ireland E0.3bln -- to turn net cash flows positive to the tune of E0.7bln vs -E25.7bln last week.

Elsewhere, Japan's benchmark stock indices ended Monday's session mixed, rallying off the session lows in the afternoon session. The Nikkei 225 was lower by 21.05 points, or 0.21%, to stand at 10236.51 However, the broader-based TOPIX was 4.85 points higher at 905.80. Volume for the Nikkei constituents totalled a preliminary 1.274 bln shares, with 110 issues trading higher, 101 lower and 14 unchanged.

DAILY CALENDAR
The Eurozone finance ministers meet in Luxembourg today, although data is limited in Europe with just the 0900GMT release of EMU construction production.

Also at 0900GMT, Ifo head Hans-Werner Sinn talks to the press in Berlin, while at 0930GMT, ECB Governing Council member Ewald Nowotny is due to hold the opening address at a conference on Austria and Central Europe, in Vienna

At 1000GMT, the Bundesbank issues it's monthly report, while later on, at 1215GMT, Ifo head Hans-Werner Sinn is back on the wires, delivering a speech on "European strategies in answer to the economic crisis," in Berlin.

US data starts at 1330GMT with the weekly MNI Capital Goods Index, which is followed at 1430GMT by the weekly MNI Retail Trade Index.

At 1500GMT, Fed Chairman Ben Bernanke delivers a speech on Asia and the global crisis at the San Francisco Fed's Asia Economic Policy Conference in Santa Barbara. An audience Q&A session is expected to follow.

At 1620GMT, Kansas City Fed President Thomas Hoenig moderates a panel on economic growth and the institutional framework, along with ECB's Christian Noyer, and Argentina Central Bank Gov. Martin Redrado at a Bank of Mexico International conference in Mexico City.

US data continues at 1700GMT with the Oct Housing Market Index (NAHB). Later on, at 2030GMT, Fed Vice Chair Donald Kohn delivers brief remarks on competition and productivity and also moderates a panel at the Bank of Mexico International conference, while at 2150GMT at the same event, Bank of Spain Gov. Miguel Fernandez Ordonez appears on a panel on price stability.



Best Regards,

NordMarkets.com

Trading in Larger Time Frames

Written by Pip Wrangler
Topics: Planning A Trading Career, The Disciplined Forex Trader, Types of Traders

There are three main trading styles.
They are:

Day traders 1-5-15 minute time frames
Swing traders 30 minute to 4 hour time frames
Position traders 1day and longer

(These are general rankings for the time frames of the trading styles)

Day traders go for smaller numbers of pips and large number of lots. They are in and out of the market many times a day.
Swing traders are in trades from a few minutes up to a few days. They may be in and out of the market a few times a day.
Position traders may be in a trade for weeks, months or years.

Day traders like a lot of movement and action in the market.
Swing traders like movement but a trend is better. The trend is based on 4 hour time frames maybe day time frames.
Positions traders may look for trends on days or months.

Over the years we have observed that the longer term traders make more money in the long run. This observation has been supported by many seasoned traders saying the same thing. The thing we want to point out here is that when a trader first starts out they usually want to place trades get in and out of the market, they want to see action. The more time they spend trading they start to look for longer term trades and have more patients. Many successful traders will never move to the position trading ranks but they do move to some place between the short term swing trader and the true position trader.

We would suggest that traders will make more on some well placed longer term trades than they will on being in and out of the market. It doesn’t hurt to learn how to recognize entry and exit signals by getting in and out of the market. In fact this is the method we teach with Jump Start. When a person moves on to Launch Pad we share ideas on how to stay in a trade longer. Each trader needs to find their place in the market according to their personality, time to trade, and trading goals. There is no wrong way or style of trading. There are some poor executions of trading strategies and lack of knowledge on how to trade.

Determine the type of trader you are and what goals you are striving for. Study, learn to trade and be patient. The foreign currency market is learnable and doable if you take your time and stick with it.

NordMarkets Morning FX - October 16

MORNING FX

BRIEFING
The dollar remained under pressure into Asian trade Thursday, though early rally in dollar-yen (due to Gotobi Day demand into the Tokyo fix being larger than normal) provided an early anomaly. Wednesday strong earnings report from JPM, followed by better than expected US retail sales helped to boost risk on trades/dollar sales in this session, with the later release of FOMC Minutes had little new info but showed that doves still outweigh hawks which will boost market perception that the Fed remains an expected laggard for rate hikes. Release of strong NZ CPI data provided the Kiwi with another boost, the move inturn prompting further movement into risk trades to the detriment of the dollar. Euro-dollar progressed higher, moving above $1.4950 to $1.4961 with rate retaining a firm feel into early Europe. Focus on $1.5000. Dollar-yen posted highs at Y89.66 into the fix before French name sales reversed the move to take it back to Y89.27. Cable extended to $1.6070 in Asia (Europe high now $1.6075). GS and Citi Q3 earnings today's highlight along with EZ and US inflation.

EURO
Euro-dollar opened in Asia around $1.4930 with risk on trades boosted by Wednesday's release of stronger than expected JPM Q3 earnings, US retail sales data, with FOMC Minutes continuing to suggest that the US will lag other major economies in hiking rates as doves appear to still outweigh hawks. Euro-dollar initially eased to mark session lows at $1.4920, as dollar-yen saw strong Gotobi Day demand into the Tokyo fix, but quick reversal after prompted renewed pressure on the dollar. Strong NZ CPI data, along with hawkish comments from RBA Stevens further boosted risk on trades, with commodity currencies again the main beneficiaries as they led the move against the dollar. Euro-dollar found the impetus to move above Wednesday highs at $1.4948 to take out suggested barriers at $1.4950, the move peaking in Asia at $1.4961. Further demand into early Europe has extended move to $1.4967. Offers are reported in place from around $1.4970, with further interest seen positioned ahead of option barriers at $1.5000. Support at $1.4920. GS and Citi Q3 earnings in focus, along with EZ and US inflation data.

Euro-dollar bulls remain focused on the recent bull-flag target, which nearly matches the $1.4968 level that capped topside of the pair in Nov 2007. The daily studies are still pointing higher and below historic levels of reversal, although trade is now pushing outside of the Bollinger band, which sends a warning against expecting rapid gains.



YEN
Dollar-yen closed the US session around Y89.45, with euro-yen holding gains within the Ichimoku Cloud at Y133.50. Traders noted model names buying the cross prior to the Tokyo open, lifting the rate through stops at Y133.75/85 en-route to the day's highs at Y133.91. Dollar-yen found larger than usual fixing demand thanks in part to Gotobi day, taking the pair up to Y89.67. A French name was the noted seller here, sending the rate back down to the day's lows at Y89.27 in quick time. Balance of the session was well contained as dollar-yen struggled to get back above Y89.50 and the cross held under earlier highs, pullbacks so far contained around the Y133.50 area. Stops said to be building above Y134.00 from system accounts, while techs note the top of the Ichimoku Cloud comes in at Y133.96 today, together with the 50% retrace of the August-October sell-off at Y133.90. Dollar-yen bids come in on approach to Y89.00, while offers are found at Y89.90/00 with stops at Y90.05.

Dollar-yen is attempting to break out of the first of it's broad falling ranges and tested the 21-DMA and Kijun lines to Y90.44. However, daily studies are failing to provide significant support to the recovery, keeping the overall downtrend in play. Meanwhile, the daily studies remain bullish in euro-yen as the cross tests major resistance levels at Y133.90/00, including the 100-DMA, top of the Ichimoku cloud and a 50% retracement of the post-August decline.



STERLING
Opened Asia around $1.6270, touched an early low of $1.6261 before recovering back, the upside gaining momentum on strong demand for sterling-yen from system funds, general yen sales seen into the Tokyo fix and triggered stops through stg0.9140/35 adding further weight. Cable moved above $1.6300, hitting a technical target level at $1.6350 (mentioned in bullets Thursday), with triggered stops through $1.6355 taking it on to $1.6401. Rate eased off highs, meeting renewed support at $1.6325 before recovering back to $1.6360/65. Early Europe took advantage of the late Asia recovery to take profit, easing the rate through earlier pullback lows to $1.6285. Rate currently trades around $1.6300. Support seen placed between $1.6285/80, stronger between $1.6260/50 ahead of $1.6210/00. Resistance seen at $1.6330, more toward $1.6350.

Cable was capped by the 21-DMA on Weds but this level is being broken at $1.6035 as daily studies point higher and momentum recovers the zero line. Close above 21-DMA would encourage bulls and be the first such close since Sep 17. Tuesday's high in euro-sterling matched that of March 27th and briefly popped over the Bollinger band top, which is currently at stg0.9395. The 21-DMA provides the main support, back at stg0.9180, although the previous highs should provide support ahead of there. Studies are neutral.




OPTIONS
Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.4950, $1.4850, $1.4815
* Dollar-yen; Y91.00, Y90.70, Y91.30
* Cable; $1.6000
* Dollar-Canada; C$1.0400, C$1.0275

DAILY CALENDAR
The main European events for Friday start at 0800GMT when ECB Executive Board member Lorenzo Bini Smaghi delivers a speech, in Siena. This is followed by the EMU August trade balance at 0900GMT.

US data starts at 1300GMT with the Treasury International Capital System data, which is followed at 1315GMT by Industrial Production and Capacity Use data.

Industrial production is expected to rise 0.2% in September after posting stronger gains in the previous two months. Manufacturing production may decline this month due to a decline in auto sales.

Factory payrolls fell 51,000 in the month, with auto production jobs were down 4,000. The factory workweek slipped to 39.8 hours, while the ISM production index fell to 55.7. Capacity utilization is forecast to stay at 69.6%.

US data continues at 1355GMT, when The Reuters/University of Michigan Consumer Sentiment Index is expected to rise to a reading of 74.0 in early-October.

At 1400GMT, ECB Executive Board member Lorenzo Bini Smaghi delivers another speech, this time in Florence.

At 1415GMT, Dallas Fed President Richard Fisher delivers the keynote address at a conference co-sponsored by SMU's Cox School of Business in Dallas.

At 1530GMT, ECB Governing Council member Axel Weber delivers a speech, in Konstanz (Germany).

Late US data sees the 1800GMT Treasury Statement where the Treasury is expected to post a $31.0 billion deficit in September compared with the $45.7 billion surplus in September 2008. The full fiscal year deficit is much deeper than the previous year's level due to the fiscal stimulus packages and a dip in tax receipts.



Best Regards,

NordMarkets.com