Forex rebates on every trade - win or lose!

Nicked 15 more points and now I'm finished for the day. Off up to sunny Hull ;(

5/6/2005 2:19 pm: EUR/$..1.2939 $/JPY..104.61 GBP/$..1.9014 $/CHF..1.1946 AUD/$..0.7791 $/CAD..1.2445

Will US Payrolls Reflect the Soft Patch? by Ashraf Laidi


7:00 am Canada April Change in Employment (exp 17K, prev 4.4K), Canada April Unemployment Rate (exp 6.9%, prev 6.9%) 8:30 am US April Change in Nonfarm payrolls (exp 100K, prev 110K), US April Unemployment Rate (exp 5.2%, prev 5.2%) US April Average Hourly Earnings (exp 0.2%, prev 0.3%) 8:35 am Bank of Canada Governor Speaks.

Markets brace for this mornings release of the US non-farm payrolls, which we expect to show an increase of 95K-100K jobs rise in April, compared to consensus estimates of a 175K rise and 110K in March. Our rationale for the forecast is founded on the poor showing in the manufacturing ISMs employment index, falling to a 14-month low in April and the 2-month consecutive decline in the manufacturing ISMs employment index. These diffusion indices suggest further slowing in the trend of payrolls. Traders will also scrutinize the average hourly earnings, which are expected to slip to 0.2% from 0.3%. We also expect the March retreat in services payrolls below 100K and the renewed shedding of manufacturing jobs in to extend to April at a time when all indicators have indicated a slowdown in economic activity.

A payrolls figure of less than 120K coupled with an average hourly earnings growth of less than 0.3% should be dollar negative suggesting low inflation and cooler economic activity. The unemployment rate could edge down to 5.1% if payrolls come in between around the 100K-130K range.


Sterling drops as Blair wins with reduced majority

Cable is losing more than half a cent to $1.9010 after UK Prime Minister Tony Blair's Labor Party won yesterday's UK election with a margin of victory reduced to 66 seats from 161 seats five years ago. Blairs eroding majority is seen posing political difficulties especially as his Party attempts in passing legislation.

Sterling drifts around just above the $1.90 figure, at the 38% retracement of the $1.9214-1.8884 decline. A drop below $1.90 sees interim support at the 100 MA of $1.8950. Key foundation stands at $1.89. A US payrolls report of less than 120K could see cable boosted past the $1.9090the 61.8% retracement of the said move. Key resistance remains at $1.9120.

Aussie steadies after post RBA retreat

Aussie is gradually regaining the 78 cent figure after losing modest ground following the Reserve Bank of Australias decision to hold rates unchanged for the second consecutive month at 5.50%. The RBA said in its statement that the March rate hike: is starting to have a dampening influence on demand and that: The December quarter national accounts continued the pattern of previous quarters, showing weak growth in GDP alongside above-trend growth in domestic demand. But the central bank did leave the door open for possible tightening down the road stating: Based on previous cyclical experience, it would be surprising if interest rates did not have to increase further at some stage of the current expansion.

It would take another disappointing payrolls report from the US for Aussie to break its downward channel on the hourly chart. A figure below 120K should boost Aussie past 78.25 cents, with subsequent pressure emerging at 78.40. A break below than 77.75 cents, sees key support at the 100-day MA of 77.55 cents, followed by the 77.20 low. Upside seen capped at

Euro requires another US payrolls disappointment

Euro bulls seek another disappointing non-farm payrolls report for an essential source of impetus following this weeks Fed statement expressing the US soft patch. Increased doubts over the continuity of US rate hikes due to growth concerns and systemic risks in US markets have started to underpin the single currency at the 200-day MA.

We see the euros upside testing the $1.2984resistance--which is the 61.8% retracement of the decline from the $1.3123 high to the $1.2828 low. This follows upside pressure at $1.3030. We do not think that a surprisingly strong US payrolls--such as above 250K--would increase chances of more aggressive Fed tightening, thus we see euro support initially tempered at $1.29 and 1.2850.

Yen pauses for breather

The yen rally has somewhat receded as the dollar edged up to the 104.60s after Japanese markets reopened a lightly traded session following the week-long Golden Holiday in Japan. But the pair remains on its way to its 4th week in a row for the first time since November. A report from Chinas Finance Ministry saying growth remains too strong has not dented the dollar/yen rate.

USDJPY sees interim resistance at 105, followed by 105.30. We expect the dollars downward bias to call up support at 104.40--the 61.8% retracement of the 101.66-108.86 move, followed by 103.70.

USDCAD eyes falling 100 day MA

It would be CADs chance to drag USD past the 200 day MA of 1.2430 if Canadas employment does show a rise of at least 15K jobs and its US counterpart shows a soft 110K or less. But a positive US surprise (above 200K) could boost USD towards 1.2490 and 1.2530. A drop below the 200-day MA of 1.2430, is seen stabilizing at 1.2379the 38% retracement of the 1.1976-1.2633 move.

These are the cable dailies since last Autumn.



1.8850 or thereabouts looks to be quite a key level to me. If it goes, I suspect that the slide will continue to around 1.8650 where it last found support in March and April. If it holds, you're back up to 1.91.

Hil: mail sent.

Edit: OK, the FX Fairy called by, now *you* do the ironing.

Well done the Fairy.

:o)

5/9/2005 1:40 am: EUR/$..1.2808 $/JPY..105.26 GBP/$..1.8878 $/CHF..1.2073 AUD/$..0.7733 $/CAD..1.2434

Dollar Seen Retaining Gains Until Trade Figures by Ashraf Laidi


4:30 am UK Mar Manufacturing Production (exp 0.1%, prev -0.5%), UK Mar Industrial Production (exp 0.2%, prev -0.4%) 6:00 am Germany Mar preliminary Industrial Production (exp -0.4%, prev -2.1%), 7:00 am Bank of England Interest Rate Decision (exp 4.75%, prev 4.75%)

The dollar starts the week as strongly as it ended the last following Fridays surprisingly strong showing of the April employment payrolls, defying emerging conditions of an economic soft patch in the US. As Fed fund futures revised up their expectations for a year-end target of 3.75-4.00% from a recently downgraded 3.5%, the dollars broadened its rally, and further neared the 200-day moving average of 84.69 in the trade weighted index. A breach of the 85.00 level could open the way to the February high of 85.44.

Markets turn to Tuesdays trade balance figures from the US expected to show a new record of $62 billion, which could temporarily cool the dollars rally. A figure above $62 billion could have a more protracted negative impact as it would be seen eroding a bigger bite off Q1 GDP and lead to a revised real Q1 GDP growth of less than 3.0%. But dollar bulls could take heart from an expected 0.7% increase in April retail sales, which if realized, could further dampen concerns of a cooling US economy and boost expectations of extended Fed tightening beyond June. In such case, we would expect the retail sales figure to command the greater FX impact, especially of core retail sales (excluding autos) are seen increasing by as much as 0.5%.


Speculators favored euro, Aussie and yen

Speculators edged away from the dollar, in favor of the euro, yen and Aussie, while further reducing their positions in Sterling, Loonie and Swissie against the greenback.

Euro net longs rose 16% last week to 4,875 contracts, breaking a 6 week falling streak. That was the longest streak of weekly declines since the 6-week period ending in late December of last year. Since the reported data was for the period ending last Tuesday, it did not reflect Fridays post payrolls sell-off.

Yen shorts fell by 57% to 14,131 contracts, further curtailing the bearishness ensued between mid March and late April. This was the second weekly drop in net shorts after bearishness topped at 54,697 contracts 2 weeks ago. Speculation of an impending revaluation in Chinas currency, coupled with concerns of slowing Fed tightening helped fuel the yen to 6-week highs against the dollar.

AUD net longs edged up 8% to 29,365 contracts, the highest since the week of April 22. Aussie longs have risen during 12 out of the 18 weeks of the year-to-date.
Sterling net longs fell 16% to 19,878 contracts, dropping for the second week in a row after having risen for 3 straight weeks prior. We expect to see further drop in net longs from next weeks data reflecting last weeks 2 cent tumble in cable, resulting from a reduced majority in the victorious Labor partys majority and the Friday drop.

CAD net shorts fell 35% to 33,321 contracts, posting their fourth weekly increase, the worst level of bearishness in 3 years.

CHF net shorts rose by a third to 13,330 contracts.

Sterling could lose fresh ground after BoE rate decision

Sterling traders are seen reluctant posting taking any fresh bids in sterling ahead of this mornings Bank of England decision, widely expected to hold rates unchanged at 4.75%. Enforcing expectations of a no rate hike is last weeks manufacturing and sales report dipping to 2-year lows, including a recessionary manufacturing sector. Friday proved a double blow for sterling after Prime Minister Tony Blair's Labor Party majority more than halvedand after the US non-farm payrolls came in 100K above expectations at 274K.
Cable could stabilize before the BoE decision in the event that manufacturing production figures show an increase of least 0.1%.

Downside seen testing the $1.8830 supportthe 61.8% retracement of the $1.8600-1.9213 rise. This figure also coincides with the 6-month trendline support extending from the $1.7750 low. Key support stands at $1.8750. Upside seen temporary capped at the 100 MA of $1.8950, followed by $1.897550% retracement of the said move.

Euro drifts below 20-month trend line, 200 day MA

Euro is currently trading below its 200 day moving average and the major trend line support of $1.2850, extending from the Sep 2003 low of $1.0761. It is also Fridays stronger than expected payrolls from the US was a wake-up call for euro bulls, especially that it gave the euro its biggest daily drop in more than a month.

Traders have already witnessed the euros sell-off testing its 200 day MA in mid April, but turning higher thereafter. We see interim support starting at $1.2765 low, followed by $1.2730. Key support (as seen in latest Article chart) remains at $1.2707the 50% retracement of the rally from the $1.1790 low to the 1.3662 high. Upside capped at the 200 day MA of $1.2850, followed by 1.2875.

Yen drops amid absence of yuan talk

Fridays payrolls report coupled with the absence of fresh talk from fading speculation of a near-term yuan revaluation is dragging the Japanese currency across the board. Further optimism of a fading soft patch could boost the dollar to no more than 105.75, with 106 serving as key resistancethe 38% retracement of the 108.86-104.42 drop. Support seen acting at the 100-day ma of 105, followed by 104.70 and 104.40--the 61.8% retracement of the 101.66-108.86 move.

Aussie seen drifting to 77 cents

Testing the downside of the its 2 1/2 week consolidation, Aussie is under strain from Fridays payrolls and the statement from the Reserve Bank of Australia decision indicating that the March rate hike: is starting to have a dampening influence on demand. Although, the central bank left the door open for possible tightening down the road, the potential for a summer tightening remains dubious.

A drop below 77.20 is seen stabilizing at 77 cents, unless traders are emboldened to open fresh USD bids, which could drag the pair down to 76.87 supportthe 61.8% retracement of the 75.00-79.86 rise. Resistance starts at the 100-day MA of 77.60 followed by 78 cents.

USDCAD stabilizes around 200 day MA

The dollar is finally stabilizing against the loonie after failing to rally on Friday despite the strong US job figures. Canadas job report showed an increase of 29.3K, about 75% greater than expectations. But the greenback is stabilizing around the 200 day MA of 1.2420.

Upside seen capped at 1.2470, with accumulated bids seen topping out at 1.25. A drop below 1.2420, is seen stabilizing at 1.2379the 38% retracement of the 1.1976-1.2633 move.

Treasury official: China ready for currency flexibility
AFX


WASHINGTON (AFX) -- China has made 'sufficient progress' to introduce exchange rate flexibility now, a U.S. Treasury spokesman said Monday following meetings between Chinese and U.S. financial officials. Officials discussed exchange rate policies, central bank open market activities and other subjects for about two and a half hours, spokesman Tony Fratto said. U.S. and Chinese financial officials may meet again as soon as this summer in Beijing, he said.



This story was supplied by MarketWatch. For further information see www.marketwatch.com.

Made a nice, early morning 40 short. Now long from 785

[EDIT - way too previous on that long - closed flat - but looking for the turn - always a bit scary - often quite expensive ;( ]

G'morning ten four

Morning choccypops
Just gone long from 770 - hoping for a clean turn - a bit previous I suspect

If that's the case then we've both been a bit previous :)

Could be messy ;)

There's nothing like adding to a good position ;)

Oooooooooh some people ;)

Added, 'cos I think I can see a new way in !!!!

I wish I could say I'm trying it from 69, but I'm afraid it's 72 ;)

[EDIT - I think it's the "bend at the end" ]

Well I wasn't going to say...but it was between 68 and 70 :)

Oi, choccypops (choccypops? Good God) and you, Maggie's ex, this is a serious FX traders' thread, less of the smut and innuendo (MM, from the safety of California).

MM
Hey, man, chill - have one of those hash cookies with your breakfast ;)

Papal Proclamation No 69 (for after the white smoke)

mg XIV

mg: :))

Who me, MM? Chocolate wouldn't melt in my mouth..

Heyy popiepops - you got your order wrong there again :)

choccypops: there's a load of Mumm Napa wine in my office here, several months' deliveries. Party time.