{"id":13715,"date":"2010-10-06T08:37:17","date_gmt":"2010-10-06T12:37:17","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13715"},"modified":"2010-10-06T08:37:17","modified_gmt":"2010-10-06T12:37:17","slug":"forex-daily-market-commentary-126","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/06\/forex-daily-market-commentary-126\/","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 dollar found a foothold during the Asia session but was unable \t\t\tto recover ground lost during yesterday’s selloff. Asian equities \t\t\tfollowed their US counterparts higher, with the Nikkei-225 up +1.5% \t\t\tat the time of writing. The S&P500 had earlier closed up 2.1%. Gold \t\t\tmade a new record high of $1350\/oz, as investors continue to fret \t\t\tover the possibility of a synchronised return to quantitative easing \t\t\tby the world’s largest economies. EURUSD traded 1.3823-1.3859, \t\t\tUSDJPY 83.07-83.30. A positive data release was not enough to deter \t\t\tthoughts of more Fed action overnight and instead kept risk-seeking \t\t\tintact. The non-manufacturing ISM increased more than expected to \t\t\t53.2 in September and our analysts’ all-economy ISM index, which \t\t\tcombines the manufacturing and non-manufacturing indexes, also rose \t\t\tin September to 53.4, a level that is historically consistent with \t\t\treal GDP growth of around 2.5%. The level is also consistent with \t\t\tthe upside risks that our economists have been emphasizing to their \t\t\tforecast for Q3 real GDP growth (1.5% est). A Wall Street Journal \t\t\tinterview with Chicago Fed President Evans, a 2011 FOMC voter, \t\t\tstoked investor expectations of more Fed action as he said the Fed \t\t\tneeds to do much more to aid the economy. There are no major \t\t\treleases due from the US today. Expectations will now likely build \t\t\tas the Q3 earnings season gets underway tomorrow, and the payrolls \t\t\treport on Friday comes into view.
\nEUR<\/span><\/em><\/strong><\/p>\n

Services PMI improved to 54.1 and the latest data, in general, \t\t\tsuggest that domestic demand is improving. However, both the \t\t\t“incoming business” and “employment” component fell, suggesting the \t\t\toutlook remains uncertain. Final Q2 GDP is expected to be confirmed \t\t\tat 1.0% q\/q but with an uncertain outlook, ECB officials will need \t\t\tto exercise more caution as momentum potentially slows.
\nECB President Trichet said that China’s declaration of its \t\t\tconfidence with respect to Eurozone debt is appreciated. However, he \t\t\talso said Chinese authorities do not share Europe’s view on the need \t\t\tfor a faster yuan appreciation. Elsewhere, Eurogroup Chairman \t\t\tJuncker said the yuan remains undervalued and that more FX \t\t\tflexibility is in the interest of China. Currency imbalances will \t\t\tremain a major topic in the weeks to come.
\n JPY<\/span><\/em><\/strong><\/p>\n

After yesterday’s policy surprise from the BoJ there were no \t\t\tmarket-moving developments during the Asia session. USDJPY remains \t\t\tclose to its 15-year lows after initially rising on the back of \t\t\tyesterday’s policy decision. The yen’s intraday recovery probably \t\t\thas less to do with a sense that the BoJ did not ease enough, and \t\t\tmore to do with growing expectations that the Fed will follow suit.
\n GBP<\/span><\/em><\/strong><\/p>\n

At 52.8 (cons. 51.0, prev. 51.3) Services PMI for September was \t\t\tabove expectations. As such business activity has improved. However, \t\t\taccording to our economists the outlook remains uncertain, \t\t\tespecially as the “new orders” component fell to the lowest level in \t\t\ta year. As such the BoE will likely keep a cautious stance on \t\t\tmonetary policy.<\/strong><\/p>\n


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

BoC Senior Deputy Governor Macklem said that the current policy rate \t\t\tat 1% ensures that financial conditions remain expansionary, a \t\t\tsetting he described as appropriate. However, he indirectly raised \t\t\tthe possibility of further accommodation, noting that the BoC’s move \t\t\taway from its emergency policy stance provides some flexibility if \t\t\tthe Fed eases further. He also said the BoC becomes concerned about \t\t\tthe CAD if it turns volatile, but would only intervene in \t\t\texceptional circumstances.<\/p>\n

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


\n<\/span><\/strong> EURUSD targets 1.3896.
\nEURUSD BULLISH Momentum is positive; the pair targets 1.3896 with \t\t\tscope for 1.4194 next. Near-term support holds at 1.3637 ahead of \t\t\t1.3381.
\nUSDJPY BEARISH Look for a break below 82.88 for extension of bearish \t\t\ttrend towards 79.75. Resistance remains at 83.99 ahead of 85.40.
\nGBPUSD BULLISH Move above 1.5999 and 1.6069 would expose 1.6276. \t\t\tSupport at 1.5670 ahead of 1.5503.
\nUSDCHF BEARISH Clearance of 0.9709 exposes 0.9590 and 0.9500 next. \t\t\tResistance at 0.9918 breakout low.
\nAUDUSD BULLISH Upside potential held at 0.9751, clearance of the \t\t\tlevel would expose 0.9850. Initial support defined at 0.9542, \t\t\tyesterday’s low.
\nUSDCAD BEARISH Focus is on downside; initial support lies at 1.0108 \t\t\tahead of 0.9931. Resistance comes in at 1.0380.
\nEURCHF BULLISH Violation of 1.3467 would pave the way for a move \t\t\ttowards 1.3651 ahead of 1.3924 key resistance. Support at 1.3265 \t\t\tahead of 1.3165.
\nEURGBP BULLISH Next resistance above 0.8738 lies at 0.8808. Support \t\t\tholds at 0.8563 ahead of 0.8510.
\nEURJPY BULLISH Expect gains to extend towards 116.68 and 119.33 \t\t\tnext. \t\t\t \t\t\tNear-term support comes in at 112.98 ahead of 115.53.<\/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 dollar found a foothold during the Asia session but was unable to recover ground lost during yesterday’s selloff. Asian equities followed their US counterparts higher, with the Nikkei-225 up +1.5% at the time of writing…<\/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-13715","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13715","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=13715"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13715\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}