{"id":13204,"date":"2010-09-21T08:30:20","date_gmt":"2010-09-21T12:30:20","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13204"},"modified":"2010-09-21T08:30:20","modified_gmt":"2010-09-21T12:30:20","slug":"forex-daily-market-commentary-115","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/21\/forex-daily-market-commentary-115\/","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

The main risk event ahead is today’s FOMC announcement. Although the \t\t\tprospect of further quantitative easing has been highlighted for \t\t\tthis meeting, our analysts do not think that will be the case. They \t\t\texpect little change to the statement language describing the \t\t\tcurrent conditions or the outlook. On the growth outlook, however, \t\t\tour team notes that Fed officials may alter the phrase that \t\t\tnear-term growth will be “more modest…than had been anticipated” \t\t\tin order to avoid implying a further downgrade. While there is a \t\t\tpossibility that the Fed might signal increased readiness to ease \t\t\tits balance sheet policy further, our analysts do not believe that \t\t\tthe medium-term outlook has deteriorated enough to warrant the \t\t\tchange. If no further quantitative easing is announced, the USD \t\t\tshould be supported as expectations of further quantitative easing \t\t\tbeing priced in weighed on the USD last week.<\/p>\n


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

Sovereign bond yields rose across the peripherals in the European \t\t\tsession over fears that Portugal may not be able to meet its fiscal \t\t\ttargets. Both Portuguese and Irish 10y spreads vs. Germany reached \t\t\trecord highs, widening to 375 and 412 basis points, respectively. \t\t\tThis followed news on Friday, where a headline in an Irish newspaper \t\t\twarned that Ireland was “perilously close” to calling in the IMF. \t\t\tThe government described the article as “a local misinterpretation \t\t\tof a research report”, and the IMF said it does not foresee its \t\t\tassistance being needed in Ireland.
\nAhead of today’s Irish bond auction, in an attempt to calm the \t\t\tmarket, Irish Prime Minister Cowen and Finance Minister Lenihan held \t\t\ta press conference in which PM Cowen said that he had the full \t\t\tsupport of his colleagues and Finance Minister Lenihan said that \t\t\tbond markets are not influenced by minor political disputes.
\nBoth ECB Governing Council Members Nowotny and Mersch opined on the \t\t\tfuture of the ECB’s liquidity tenders, a topic that has proven to be \t\t\ta significant driver of the euro in recent weeks. Nowotny noted that \t\t\tsome parts of the Eurozone banking system are “addicted” to ECB \t\t\tliquidity, and that the problem should be solved primarily by \t\t\tgovernments. Mersch said he saw “no need to hold onto full \t\t\tallotment”, noting that “short term rates can be very easily \t\t\tcontrolled via competitive tenders”.
\n JPY<\/span><\/em><\/strong><\/p>\n

With Japan on holiday, USDJPY was relatively quiet and range bound \t\t\ton Monday despite an early dip, suggesting the BoJ has not been \t\t\tactive in FX markets since Wednesday.
\nSpeculation is mounting that a bill aimed at incorporating an \t\t\texplicit inflation target into BoJ Law could soon be presented to \t\t\tJapan’s Diet. We are sceptical of claims that a change to the Law is \t\t\timminent on two counts: first, parliamentary time in the immediate \t\t\tfuture is likely to focus on agreeing the terms of the budget for \t\t\tthe coming fiscal year; second, a change to BoJ Law would require \t\t\tthe approval of both the upper and lower houses of parliament. With \t\t\tno party holding a majority in the upper house, at the very least \t\t\tthis would likely complicate and delay the passage of any such bill. \t\t\tThe next parliamentary session is expected to begin in early \t\t\tOctober.
\n GBP<\/span><\/em><\/strong><\/p>\n

M4 money supply fell by 0.2% m\/m, leaving the annual rate at a \t\t\trecord low of 1.8%. Mortgage backed approvals in August fell roughly \t\t\tin line with consensus at 45k, an indication that the recent housing \t\t\tmarket recovery may have been exhausted.
\n AUD<\/span><\/em><\/strong><\/p>\n

RBA Governor Stevens offered a relatively hawkish assessment, noting \t\t\tthat. “the fall in inflation over the past two years won’t go much \t\t\tfurther.” However, he did acknowledge that the global growth outlook \t\t\twas uncertain and that although global growth will be “reasonable” \t\t\tnext year, it would not be as strong as the current year. Stevens \t\t\talso identified three key risks to Australia: a deeper than expected \t\t\tslowdown in China, a US double-dip, and the return of market \t\t\tturmoil.<\/p>\n


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

Finance Minister Flaherty said Canada’s fiscal stimulus measures \t\t\twould expire as planned in March 2011.
\nAhead today is Canada August CPI. The July CPI had a jump at the \t\t\theadline due to provincial tax changes. The August read in expected \t\t\tto be more subdued and the focus will be on the core CPI read \t\t\trelative to the BoC’s forecast. Our economists expect core CPI to \t\t\ttick up 0.1% m\/m leaving the year-on-year rate unchanged at 1.6%.<\/p>\n

<\/p>\n

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


\n<\/span><\/strong> EURCHF resistance at 1.3391.
\nEURUSD NEUTRAL Need a break above 1.3334 to trigger bullish trend. \t\t\tSupport holds at 1.2919.
\nUSDJPY NEUTRAL Momentum is slowing; while resistance is at 85.93, \t\t\tsupport comes in at 85.20 ahead of 84.05 retracement level.
\nGBPUSD BULLISH While support at 1.5297 holds, expect recovery to \t\t\ttarget 1.5999 with scope for 1.6258 next.
\nUSDCHF BEARISH Clearance of 0.9933\/18 would expose 0.9786 next. \t\t\tNear-term resistance comes in at 1.0278 ahead of 1.0466.
\nAUDUSD BULLISH Expect gains to target 0.9500 ahead of 0.9850. \t\t\tNear-term support is at 0.9309 ahead of 0.9196.
\nUSDCAD NEUTRAL 1.0509 and 1.0108 mark the key near-term directional \t\t\ttriggers.
\nEURCHF NEUTRAL Recovery found resistance at 1.3391 ahead of 1.3482 \t\t\tretracement level. Near-term support comes in at 1.2991.
\nEURGBP NEUTRAL Trading within 0.8532 and 0.8142 which have now \t\t\tbecome 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><\/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":"

The main risk event ahead is today’s FOMC announcement. Although the prospect of further quantitative easing has been highlighted for this meeting, our analysts do not think that will be the case…<\/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-13204","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13204","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=13204"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13204\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}