{"id":13120,"date":"2010-09-17T08:45:01","date_gmt":"2010-09-17T12:45:01","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13120"},"modified":"2010-09-17T08:45:01","modified_gmt":"2010-09-17T12:45:01","slug":"forex-daily-market-commentary-113","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/17\/forex-daily-market-commentary-113\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at \t\t\t0800 GMT (EDT + 0400)<\/span><\/strong><\/p>\n

<\/strong><\/p>\n

<\/strong><\/p>\n

USD<\/span><\/em><\/strong><\/p>\n

Dollar performance was mixed amid a relatively quiet session as \t\t\tequities were flat on the day. A disappointing US manufacturing \t\t\tprint helped nudge USDJPY higher with no BoJ in sight but the most \t\t\tnotable currency movers in the G10 during the US session were the \t\t\tSwiss franc crosses following the SNB’s surprisingly dovish \t\t\tcomments. But otherwise, oil drifted lower and gold is $1274.13 at \t\t\tthe time of writing. EURUSD traded 1.2976-1.3117, USDJPY \t\t\t85.23-85.84. Treasury Secretary Geithner testified before Congress \t\t\ton China’s exchange rate policy and said China needed to allow a \t\t\t“significant, sustained” appreciation of its currency and said the \t\t\tUS would continue to seek progress along with the G20 on the issue, \t\t\tthough he stopped short of any concrete actions. Senator Dodd \t\t\temphasized that unilateral intervention by “Japan, China or any \t\t\tother nation, represents a gap in international cooperation on \t\t\texchange rate policy.” In US data, jobless claims fell to 450k and \t\t\tit appears that despite some Labor Day holiday-related volatility, \t\t\tclaims are trending down after a midsummer jump. Meanwhile, the \t\t\tPhiladelphia Fed rose less than expected to -0.7 and details of the \t\t\tsurvey were less constructive. PPI figures were in line and the \t\t\tcurrent account deficit widened as expected to 3.4% of GDP, largely \t\t\ton imports. US data has avoided any major disappointments of late \t\t\tbut fears of further Fed easing likely remain, though concerns \t\t\telsewhere are helping mitigate dollar downside at this stage.<\/p>\n


\nEUR<\/span><\/em><\/strong><\/p>\n

A relatively successful Spanish bond auction helped boost the euro \t\t\tinto the US session and it held its gains throughout the day. The \t\t\tbid-cover ratio on the 2020 Spanish bonds was 2.32 compared to 1.89 \t\t\tat an earlier, similar auction. The bid-cover on the 2041 issue was \t\t\tlower but still above two times. A French auction went smoothly but \t\t\tsovereign concerns remain. Portugal announced it would sell bonds \t\t\tmaturing in 2014 and 2020 on September 22.
\nEurogroup Chairman Juncker again expressed displeasure with Japan’s \t\t\tunilateral intervention but did not think the decision will trouble \t\t\trelations. He said interventions are only fruitful if coordinated \t\t\tand the yen is not overvalued against the euro. He also said \t\t\tproblems in Ireland remain but the Irish government is able to deal \t\t\twith them.
\n JPY<\/span><\/em><\/strong><\/p>\n

USDJPY was relatively quiet as the BoJ was not seen but several \t\t\tpolicymakers in both the US and Europe expressed displeasure with \t\t\tthe recent intervention. BoJ Governor Shirakawa spoke, but offered \t\t\tno clarity on whether the injection of yen liquidity brought about \t\t\tby the initial intervention would be sterilized. Instead, he again \t\t\trepeated his misgivings about quantitative easing, saying it only \t\t\thad a limited effect on prices, and a limited effect in stimulating \t\t\tthe economy. Without citing sources, Nikkei news reported that the \t\t\tintervention would in fact be unsterilized and that intervention was \t\t\tthe largest single-day yen selling intervention on record.
\n GBP<\/span><\/em><\/strong><\/p>\n

Sterling was hit by far weaker than expected retail sales figures \t\t\tovernight, with August core consumption declining by 0.4% on the \t\t\tmonth, and headline sales declining by -0.5%. BoE Policymaker Posen \t\t\tsaid that inflation expectations matter greatly, although \t\t\tpolicymakers will not need to overreact to the recent elevated \t\t\tinflation readings as long as they can credibly persuade others that \t\t\tthe rise in inflation is due to a shock.
\nOur team continues to see sterling suffering under a weaker growth \t\t\tenvironment and data has taken a material turn for the worse of \t\t\tlate. The BoE will target inflation expectations but the growth \t\t\trhetoric is clearly to the downside.<\/p>\n


\nCHF<\/em><\/span><\/strong><\/p>\n

The SNB left rates unchanged with a target range around 0.25% and \t\t\tdelivered a remarkably dovish statement. A strong consensus had \t\t\tlooked for unchanged rates (UBS went for a hike) but most will have \t\t\tbeen surprised by the dovishness of the statement. The inflation \t\t\tforecast has been revised down over the entire forecast horizon and \t\t\tthe meeting marked a sharp reversal from the June statement, when it \t\t\tappeared that monetary tightening was imminent. The only hawkish \t\t\telement left over was the admission that the expansionary monetary \t\t\tpolicy was ‘currently appropriate, although it poses long-term risks \t\t\tto price stability’. It seems clear that the strength of the franc \t\t\thas been the key factor in the decision. So if one objective of the \t\t\tSNB was to weaken the franc, the message will likely achieve that \t\t\ttarget. Many investors will be worried by the gloomy assessment of \t\t\tthe SNB and reconsider their CHF longs. The one upside risk for the \t\t\tfranc would be if markets more broadly were to become risk averse on \t\t\tthe back of the message, in which case safe haven flows would \t\t\tstrengthen.
\nFor the next few days, however, it seems likely that the franc will \t\t\tcontinue to suffer from the realisation that rate hikes are unlikely \t\t\tfor the time being. EURCHF may well rise to 1.34 before becoming \t\t\theavy once again.<\/p>\n

<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> EURUSD NEUTRAL Model is neutral; 1.3334 and 1.2588 mark the key \t\t\tnear-term directional triggers.
\nUSDJPY NEUTRAL Upside near 85.91 ahead of 86.70 Fibonacci \t\t\tresistance. Near-term support lies at 85.20.
\nGBPUSD BULLISH While support holds at 1.5297, expect gains towards \t\t\t1.5731 with scope for 1.5999.
\nUSDCHF BEARISH Focus on 0.9918 with next support at 0.9786. \t\t\tNear-term resistance comes in at 1.0278 ahead of 1.0466.
\nAUDUSD BULLISH Bullish pressure held at 0.9458 with next resistance \t\t\tat 0.9563. Near-term support is at 0.9309 ahead of 0.9196.
\nUSDCAD BEARISH Following the break of 1.0248, model has turned \t\t\tbearish. Next support at 1.0108 with resistance at 1.0509 ahead of \t\t\t1.0673.
\nEURCHF BEARISH Move above 1.3163 exposes 1.3345 next, but broader \t\t\tfocus is on the downside with support at 1.2991 intraday low ahead \t\t\tof 1.2766.
\nEURGBP NEUTRAL 0.8532 and 0.8142 mark the key directional triggers.
\nEURJPY NEUTRAL Break of 114.74 would put odds in favour of positive \t\t\ttone. Next resistance at 116.68. Support holds at 107.73 ahead of \t\t\t105.44 key low.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/span><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/p>\n

DISCLAIMER: GCI\u2019s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dollar performance was mixed amid a relatively quiet session as equities were flat on the day. A disappointing US manufacturing print helped nudge USDJPY higher with no BoJ in sight…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13120","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=13120"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13120\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}