Roberto Abraham Scaruffi

Forex Market Updates & Commentary

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• USD/CHF Turns Toward Bearish Trend Continuation
• Brazil Upgraded by Moody’s
• EURUSD tests 100 hour MA at 1.4266
• EU’s Juncker Speaks in Luxembourg
• Bundesbank sees German 2011 unadjusted GDP growth at 3.1%, and 1.8% in 2012.
• Japanese economy minister Yosano says Japan economy is likely to see significant growth next year.
• Japanese gov’t upgrades economic assessment for the first time in 4 months.
• Eurozone current account (April) -5.1B vs. -4.8B forecast -3.0B prior reading.
• Aussie trading continually lower
• EU’s Rehn on the wires…
• Moody’s expects Greek government to win confidence vote and pass fiscal measures, adding that stakes are high for Greece on vote.
• According to a think tank researcher, China’s FX reserves are expected to be invested more in short-term assets, corporate bonds, and equities.
• German producer prices (May) 0.0% vs. 0.1% expected.
• 6-20 Calender

USD/CHF Turns Toward Bearish Trend Continuation Posted: 20 Jun 2011 07:21 AM PDT USD/CHF (daily chart) as of Monday (6/20/2011) has completed yet another bullish retracement within the context of a steep bearish trend that has been in place for over a year, since the June 2010 1.1730 area high. This retracement brought price action back up to the key 0.8550 resistance (prior support) before turning back down. Prior to this bullish retracement, price had reached its downside target around 0.8325 (the new all-time low), which represented the 161.8% Fibonacci extension of the last bullish retracement that occurred in the first half of May. In the event of a breakdown below that all-time low, which would confirm a downtrend continuation, bearish price momentum could potentially begin targeting key psychological support around the 0.8000 round number. To the upside, the noted 0.8550 level should continue to serve as resistance within the context of the current long-standing bearish trend. (Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.) James Chen, CTA, CMT Director of Technical Research and Education FXDD

Brazil Upgraded by Moody’s Posted: 20 Jun 2011 06:25 AM PDT Brazil has been raised to Baa2 from Baa3 by Moody’s, Outlook Positive.

EURUSD tests 100 hour MA at 1.4266 Posted: 20 Jun 2011 05:39 AM PDT The EURUSD has moved it’s way back to test the 100 hour MA at the 1.4266 level.  The market price has remained below the level for most of the trading day.  A move above looks to target the 38.2% retracement at the 1.4311-19 level.

EU’s Juncker Speaks in Luxembourg Posted: 20 Jun 2011 05:30 AM PDT Says: Treaty on ESM agreed ESM to be fully operational in mid-2013 Euro area to do all needed for stability Greek authorities have been extremely brave Greece must meet commitments for debt sustainability Greece is committed to budget cuts Key for Greece to pass legislation in deadline No pressure to be put on Greek bondholders Greek bond rollover to voluntary Extra Euro group meeting set for July 3 Euro-zone agrees with IMF analysis of Euro Zone Growth starting to get off the ground Agrees with IMF on long term prospects Reorganization of bank sector needs to be speedier Satisfied with Portugal and Ireland

Bundesbank sees German 2011 unadjusted GDP growth at 3.1%, and 1.8% in 2012. Posted: 20 Jun 2011 03:13 AM PDT They also added that an economic upswing should facilitate a presing need for consolidation of public finances.

Japanese economy minister Yosano says Japan economy is likely to see significant growth next year. Posted: 20 Jun 2011 02:52 AM PDT

Japanese gov’t upgrades economic assessment for the first time in 4 months. Posted: 20 Jun 2011 02:03 AM PDT

Eurozone current account (April) -5.1B vs. -4.8B forecast -3.0B prior reading. Posted: 20 Jun 2011 01:03 AM PDT

Aussie trading continually lower Posted: 20 Jun 2011 12:55 AM PDT With lower Brent and crude prices, the Aussie (and CAD) have seen continual selling to start the week. Seen below, the pair opened the week slightly lower than Friday’s close, traded in the area of the 100 and 200 hour moving averages, and has continually sold off since then. With the current candlestick the AUD/USD tests support at the 1.05029 level; we’ve tested this level at the end of last week. In the case of further selling we look to 1.04764 as the downside target; support could see us back at 1.05365.

EU’s Rehn on the wires… Posted: 20 Jun 2011 12:42 AM PDT Confident that will have an agreement on the ESM and boost to EFSF capacity. Certain that Greece will be able to take decision needed because alternative is so much worse. Need Greece to vote in favor of package. Certain Greece will take needed measures.

Moody’s expects Greek government to win confidence vote and pass fiscal measures, adding that stakes are high for Greece on vote. Posted: 19 Jun 2011 11:16 PM PDT Confidence vote win won’t guarantee Greek parliament OK’s economic policies. Significant Greek domestic political risk remains. If Greece defaulted, borrowing costs for Spain, Italy, and Belgium would rise.

According to a think tank researcher, China’s FX reserves are expected to be invested more in short-term assets, corporate bonds, and equities. Posted: 19 Jun 2011 11:12 PM PDT

German producer prices (May) 0.0% vs. 0.1% expected. Posted: 19 Jun 2011 11:00 PM PDT The market had a limited reaction to the release.

6-20 Calender Posted: 19 Jun 2011 08:59 PM PDT