{"id":13422,"date":"2010-09-28T08:45:32","date_gmt":"2010-09-28T12:45:32","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13422"},"modified":"2010-09-28T08:45:32","modified_gmt":"2010-09-28T12:45:32","slug":"forex-daily-market-commentary-120","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/28\/forex-daily-market-commentary-120\/","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

Eurozone concerns resurfaced on the back of a debt downgrade of an \t\t\tIrish financial institution but currency moves were largely quiet \t\t\tuntil a Wall Street Journal article after the equity close gave the \t\t\tdollar a slight boost. The article suggested that any further \t\t\tquantitative easing by the Fed could be less heavy-handed than \t\t\texpected as officials continue to monitor the data as they weigh \t\t\ttheir next move. But it did not necessarily dissuade the notion that \t\t\tmore easing is possible.
\nOur analysts now think the fed funds target will not be hiked until \t\t\tQ3 2011, at least three months later than their original June 2011 \t\t\tforecast. In the aftermath of the latest FOMC decision, our \t\t\teconomists do not think further quantitative easing will be \t\t\tnecessary but they do acknowledge it is now a much closer call. We \t\t\ttherefore lowered our one and three month dollar forecasts to \t\t\treflect the increased risk of further potential Fed action. There \t\t\twere no major headline US data releases and investor risk-seeking \t\t\twas muted with equities modestly lower and lower Treasury yields \t\t\tacross the curve, which was partially spurred by a good 2-yr \t\t\tauction. But among G10 currencies the Australian dollar managed to \t\t\tgain versus the dollar as the relative monetary policy differential \t\t\tremains in Australia’s favour. Upcoming data releases include \t\t\tConference Board Consumer Confidence, S&P\/CaseShiller home price \t\t\tdata and the Richmond Fed manufacturing survey. \t\t\t \t\t\tEURUSD traded 1.3426-1.3506, USDJPY 84.12-84.39.<\/p>\n


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

A downgrade of the subordinated debt of a prominent Irish bank \t\t\thighlighted widespread fears surrounding the Irish banking sector \t\t\tand the prospect of future downgrades remain. The FT reported that \t\t\tfurther updates on the situation would likely come on Thursday but \t\t\tit underscores the fact that sovereign and fiscal concerns remain \t\t\tunresolved and sovereign yields remain elevated.
\nECB President Trichet’s comments at the Quarterly Hearing before the \t\t\tCommittee on Economic and Monetary Affairs of the European \t\t\tParliament largely echoed his recent comments as he reiterated again \t\t\tthat inflation should moderate over the policy-relevant horizon \t\t\tdespite a potential short-term increase. Trichet remains cautious on \t\t\tEurozone growth and said current policy is accommodative and the \t\t\tcurrent level of interest rates is appropriate.
\n JPY<\/span><\/em><\/strong><\/p>\n

BoJ Governor Shirakawa said the BoJ will take “timely and \t\t\tappropriate action on monetary policy as needed”. Shirakawa also \t\t\topened the door to potential intervention in non-USD crosses when he \t\t\tsaid “the yen has appreciated not only against the US dollar and the \t\t\teuro, but also against fellow East Asian currencies: for example, it \t\t\thas traded at levels close to its record high against the Korean \t\t\twon”. Such intervention has not happened since 2000. Shirakawa also \t\t\twarned that if a central bank’s purchases of government bonds is \t\t\tseen as a means of paying for fiscal expenditure, or as an act of \t\t\tdebt monetisation, inflation expectations and government bond yields \t\t\twould rise. While a modest increase in inflation expectations may \t\t\tnot be a bad thing as far as the Japanese economy is concerned, \t\t\trising bond yields could lead to a substantial increase in the cost \t\t\tof servicing Japan’s public debt.
\nJapanese exports rose by less than expected to +15.8% y\/y (cons. \t\t\t+19.0%) while imports came in slightly ahead of expectations. This \t\t\tslowdown in export growth adds more weight to BOJ’s intervention \t\t\tpolicy as it highlights the negative effects that the stronger yen \t\t\tis having on the real economy.
\n CAD<\/span><\/em><\/strong><\/p>\n

Final Q2 GDP is due after the preliminary print slightly exceeded \t\t\texpectations at 1.2% q\/q and 1.7% y\/y. Consensus estimates are for \t\t\tno change.
\nThe IMF endorsed the UK’s fiscal tightening plans as it greatly \t\t\treduces the risk of a loss of confidence. The IMF noted that things \t\t\twere on the mend but also stressed that monetary policy will have to \t\t\tbe nimble in the event of further downside risks. The October 20 \t\t\tfiscal austerity measures could point to further BoE easing, which \t\t\tpolicymakers hinted at in the latest BoE minutes. We adjusted our \t\t\tGBPUSD forecasts to reflect the shift in our dollar view but think \t\t\tfiscal austerity could keep the pound weak versus the Swiss franc \t\t\tand the Nordic currencies.<\/p>\n

<\/p>\n

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


\n<\/span><\/strong> EURUSD stalled at 1.3511.
\nEURUSD BULLISH Stalled in front of 1.3511; a break here would expose \t\t\t1.3692. Near-term support comes in at 1.3426 ahead of 1.3287.<\/p>\n

USDJPY NEUTRAL 85.93 and 82.88 have now become the key near-term \t\t\tdirectional triggers.
\nGBPUSD BULLISH After the break of 1.5729, expect gains to extend \t\t\ttowards 1.5999 key high. Support is defined at 1.5642 ahead of \t\t\t1.5503.
\nUSDCHF BEARISH Following the break of 0.9786, there is scope for \t\t\tnext support at 0.9625. Resistance at 0.9983 ahead of 1.0183.
\nAUDUSD BULLISH Violation of 0.9600, psychological level, favours \t\t\tanother bullish run towards 0.9850 key high. Near-term support is at \t\t\t0.9442 ahead of 0.9309.
\nUSDCAD BEARISH Focus is back on 1.0108; break of the level would \t\t\texpose 0.9931. Near-term resistance holds at 1.0380.
\nEURCHF NEUTRAL Trading within 1.3391 and 1.2991 range. Break below \t\t\t1.2991 would expose 1.2766 key low.
\nEURGBP BULLISH Upside potential held below 0.8609 ahead of 0.8774. \t\t\tSupport defined at 0.8463 ahead of 0.8390.
\nEURJPY BULLISH While support at 110.66 holds, expect the cross to \t\t\ttarget 114.74, ahead of 116.68 and 119.33.<\/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":"

BoJ Governor Shirakawa said the BoJ will take “timely and appropriate action on monetary policy as needed”. Shirakawa also opened the door to potential intervention in non-USD crosses when he said “the yen has appreciated…<\/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-13422","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13422","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=13422"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13422\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}