{"id":13640,"date":"2010-10-04T08:35:13","date_gmt":"2010-10-04T12:35:13","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13640"},"modified":"2010-10-04T08:35:13","modified_gmt":"2010-10-04T12:35:13","slug":"forex-daily-market-commentary-124","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/04\/forex-daily-market-commentary-124\/","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

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

The dollar steadied a little during a quiet Asia session, having \t\t\tfound itself on the defensive on Friday after at least two Fed \t\t\tspeakers gave their conditional support to further easing measures. \t\t\tEURUSD traded 1.3746-1.3807 and USDJPY 83.23-83.87. New York Fed \t\t\tPresident Dudley, an FOMC voter, sounded especially dovish and \t\t\tclearly favours further policy accommodation. He noted that “the \t\t\tcurrent levels of employment and inflation, and the timeframe over \t\t\twhich they are likely to return to levels consistent with our \t\t\tmandate, are unacceptable”. Chicago Fed President Evans, who becomes \t\t\tan FOMC voter in January, worried aloud that the economic recovery \t\t\tseemed to have lost some forward momentum. However, Dallas Fed \t\t\tPresident Fisher, who also obtains FOMC voting rights in January, \t\t\tsounded less convinced about the merits of further easing, saying \t\t\tthat the efficacy of further asset purchases is unclear. On the data \t\t\tfront, the September manufacturing ISM index came in just below \t\t\tconsensus at 54.4 (cons. 54.5, prev. 56.3). Looking into the detail, \t\t\tour US economics team notes that the new orders, employment, and \t\t\texport orders components all softened. The University of Michigan \t\t\tconfidence reading was stronger than expected, rising to 68.2 (cons. \t\t\t67.0).
\nEUR<\/span><\/em><\/strong><\/p>\n

China’s Premier Wen said China supports a stable euro and will not \t\t\treduce its holdings of European bonds. He also offered to increase \t\t\tholdings of Greek debt when Greece returns to debt markets in search \t\t\tof funding. Wen continues his visit to Europe this week to propose \t\t\twhat Xinhua call “practical actions” to help solve Europe’s \t\t\tcontinuing woes. The three countries on his itinerary, Greece, Italy \t\t\tand Belgium, are the most indebted in the Eurozone.
\nECB Governing Council Member Draghi struck a hawkish note, observing \t\t\tthat many banks have a “serious exposure” to the risk of a sudden \t\t\trise in interest rates. Referring to the ECB’s unconventional \t\t\tmeasures, he said that their withdrawal should be timed so as not to \t\t\tsow the seeds of future crises by leaving too much liquidity in the \t\t\tsystem. Like some of his ECB colleagues, he noted that some banks \t\t\tremain addicted to ECB funding but that this issue should be \t\t\taddressed by national authorities, and not the central bank.
\nEU Commissioner Almunia expressed some satisfaction with the Irish \t\t\tgovernment’s plans to restructure parts of the domestic banking \t\t\tsystem, and said the EU Commission would “proceed rapidly” towards \t\t\tmaking a final decision on whether the plan would be permitted under \t\t\tEU rules.
\n JPY<\/span><\/em><\/strong><\/p>\n

The BoJ’s latest policy meeting gets underway today, with a decision \t\t\texpected on Tuesday. The local press reports that the policy board \t\t\tis close to taking further easing steps. Possible measures \t\t\treportedly include an expansion of the scale of fixed-rate liquidity \t\t\toperations from \u00a530 trn to \u00a540 trn, combined with a maturity \t\t\textension from 6 months to “around one year”. An increase in the \t\t\tmonthly intake of JGBs is also reportedly under consideration, along \t\t\twith the purchase of private sector assets and further “yen-selling \t\t\toperations”.
\nOn Friday, a Japanese government official indicated that the MoF \t\t\twould seek to impress upon the BoJ that any future interventions \t\t\tshould remain unsterilized. The local press also reported that the \t\t\tT-bill issuance calendar for October, published on Friday, shows \t\t\tthat the MoF does not plan to issue financing bills this month to \t\t\trepay funds borrowed from the BoJ to fund the recent intervention \t\t\toperations. Any such issuance would have absorbed the excess yen \t\t\tliquidity the BoJ injected through its yen selling operations.
\n GBP<\/span><\/em><\/strong><\/p>\n

Our analysts team has pushed back his BoE rate call by six months, \t\t\tand now sees the first hike coming in Q3 2011. They \u00a0also lowered \t\t\tthe end-2011 policy rate forecast to 1.0% from 2.0%.<\/p>\n

<\/p>\n

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


\n<\/span><\/strong> EURJPY clears 114.74.
\nEURUSD BULLISH Bull trend continues; targets 1.3896 next with scope \t\t\tfor 1.4194. Near-term support comes in at 1.3619 ahead of 1.3381.
\nUSDJPY BEARISH Focus is back on the downside; break of 82.88 would \t\t\texpose 79.75. Resistance remains at 84.50 ahead of 85.40.
\nGBPUSD BULLISH Bull stalls in front of 1.5999 key high; support at \t\t\t1.5670 ahead of 1.5503.
\nUSDCHF BEARISH Bearish pressure held at 1.9709 ahead of 0.9625. \t\t\tResistance at 0.9918 breakout low.
\nAUDUSD BULLISH The pair is expected to target 0.9850 with scope for \t\t\t1.000 psychological resistance next. Support is at 0.9559 ahead of \t\t\t0.9463.
\nUSDCAD BEARISH Break below 1.0192 opens up the way towards 1.0108 \t\t\tand 0.9931 next. Resistance comes in at 1.0380.
\nEURCHF BULLISH Expect recovery to targets 1.3651; need a break above \t\t\t1.3924 to confirm the positive trend. Downside risk capped at \t\t\t1.3361.
\nEURGBP BULLISH Violation of 0.8736 exposes 0.8808 next. Support \t\t\tholds at 0.8659 ahead of 0.8563.
\nEURJPY BULLISH Clears 114.74; expect gains to extend towards 116.68 \t\t\tand 119.33 next. \t\t\tNear-term support comes in at 113.76 ahead of 112.67.<\/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":"

China’s Premier Wen said China supports a stable euro and will not reduce its holdings of European bonds. He also offered to increase holdings of Greek debt when Greece returns to debt markets in search of funding…<\/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-13640","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13640","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=13640"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13640\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}