{"id":13452,"date":"2010-09-29T09:10:00","date_gmt":"2010-09-29T13:10:00","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13452"},"modified":"2010-09-29T09:10:00","modified_gmt":"2010-09-29T13:10:00","slug":"forex-daily-market-commentary-121","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/29\/forex-daily-market-commentary-121\/","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

FX price action was generally subdued during the Asia session, but \t\t\tthe dollar clearly remains on the defensive after a series of weak \t\t\tUS data reports yesterday, which markets see as bolstering the case \t\t\tfor further Fed QE. USDJPY and USDCHF in particular remain heavy, \t\t\tand the risk of further intervention by Japan’s MoF is consequently \t\t\tgrowing. EURUSD traded 1.3556-1.3596, USDJPY 83.68-84.09. Equities \t\t\tregistered some gains with the S&P500 closing +0.5% ahead. The \t\t\tS&P\/Case Shiller composite 20 home price index dipped as expected to \t\t\t+3.18% y\/y but the Conference Board consumer confidence figure and \t\t\tthe Richmond Fed missed expectations. The Conference Board index \t\t\tfell to 48.5 vs. consensus 52.1 and the drop mostly reflected the \t\t\texpectations index rather than assessments of the present situation. \t\t\tOther confidence measures have been mixed in September.
\nMeanwhile, regional surveys, including the Richmond data, have \t\t\tsuggested some slowing in manufacturing output growth, on balance, \t\t\tin September. Fed Governor Warsh alluded to the ongoing media debate \t\t\tabout competitive devaluations noting that, while a weaker dollar \t\t\twould be good for US exporters, the willingness of foreign investors \t\t\tto invest in the dollar must also be protected. Atlanta Fed \t\t\tPresident Lockhart said that he does not expect deflation to \t\t\tdevelop, but also cautioned that “the risk of deflation cannot be \t\t\tdismissed”. Several other Fed officials, including 2011 voters \t\t\tPlosser and Kocherlakota, are due to speak today. The dollar remains \t\t\tunder pressure from further easing concerns but several upcoming \t\t\trisk events in the Eurozone could keep EURUSD upside in check.<\/p>\n


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

The euro had been under pressure heading into the New York session \t\t\tdue to talk of potential Eurozone sovereign downgrades but the ECB’s \t\t\tStark’s comment that the ECB is “in the process of phasing out some \t\t\tof the non-standard measures [of support]” helped it regain some \t\t\tground and EURUSD then pushed higher following dovish BoE comments \t\t\tand US data.
\nA major rating agency had previously put Spain on review for a \t\t\tpossible downgrade from AAA in June with a 3-month review process \t\t\tthat comes to an end this week. Given that the other major agencies \t\t\talready have Spain at least one notch lower, it seems likely that \t\t\tthe downgrade will go ahead this week. Concerns over Ireland remain, \t\t\twith another ratings agency suggesting it might cut the credit \t\t\trating in the wake of concerns over a prominent Irish bank and wider \t\t\tissues over political instability. While dollar weakness is \t\t\tsupporting EURUSD, sovereign concerns could provide a near-term cap, \t\t\tespecially with a statement on a nationalized Irish bank and the \t\t\texpiry of the 12m ECB tender this week.
\n JPY<\/span><\/em><\/strong><\/p>\n

The Q3 Tankan was broadly in line with consensus and had no impact \t\t\ton the USDJPY. However, earlier the disappointing US data ensured \t\t\tthat USDJPY stayed heavy.
\nOur Analysts team notes that the increase in the headline index – \t\t\tthe large manufacturing business conditions index – reflected \t\t\tearnings improvement despite the rising yen.
\n GBP<\/span><\/em><\/strong><\/p>\n

BoE policymakers aired their differences over the newswires but \t\t\tinvestors focused on the more dovish Adam Posen’s comments. Posen \t\t\tadvocated further monetary easing as he envisions CPI falling well \t\t\tbelow target. He said additional stimulus should begin in the form \t\t\tof additional QE gilt purchases and if that did not work, then it \t\t\twould be time for further fiscal stimulus and corporate debt \t\t\tpurchases. Posen again stressed, though, that this was not a \t\t\tforegone conclusion.
\nPolicymaker Sentance, the lone MPC dissenter, wrote in a paper that \t\t\the sees no need to restart quantitative easing as it would give the \t\t\twrong impression on the state of the economy. Neither policymaker \t\t\tsaid anything markedly different from their current positions but \t\t\twith the prospect of further Fed easing, investors are even more \t\t\tclosely attuned to central bank comments.<\/p>\n

<\/p>\n

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


\n<\/span><\/strong> USDJPY focus back on 82.88.
\nEURUSD BULLISH Climb through 1.3511 yesterday exposes 1.3692. \t\t\tNear-term support comes in at 1.3381 ahead of 1.3287.
\nUSDJPY BEARISH The break of 84.05 brings our focus back on the \t\t\tdownside at 82.88. Resistance remains at 84.50 ahead of 85.40.
\nGBPUSD BULLISH Continues to trade higher; expected to target 1.5999 \t\t\tkey high with scope for 1.6253 next. Support is defined at 1.5719 \t\t\tahead of 1.5503.
\nUSDCHF BEARISH Break of 0.9780 support exposes 0.9625. Resistance at \t\t\t0.9983.
\nAUDUSD BULLISH There is little resistance till 0.9850 key high with \t\t\tinitial support defined at 0.9559 ahead of 0.9463.
\nUSDCAD BULLISH While support at 1.0192 holds, expect recovery \t\t\ttowards 1.0509 and 1.0673.
\nEURCHF NEUTRAL Trading within 1.3391 and 1.2991 range. Break below \t\t\t1.2991 would expose 1.2766 key low.
\nEURGBP BULLISH Sharp recovery yesterday held in front of \t\t\t0.8606\/0.8609 tough resistance area. Next resistance lies at 0.8736.
\nEURJPY BULLISH Momentum is positive; clearance of 114.74 would \t\t\texpose 116.68 and 119.33. \t\t\tNear-term support comes in at112.67 ahead of 110.66.<\/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":"

FX price action was generally subdued during the Asia session, but the dollar clearly remains on the defensive after a series of weak US data reports yesterday, which markets see as bolstering the case for further Fed QE…<\/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-13452","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13452","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=13452"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13452\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}