{"id":13794,"date":"2010-10-07T08:37:55","date_gmt":"2010-10-07T12:37:55","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13794"},"modified":"2010-10-07T08:37:55","modified_gmt":"2010-10-07T12:37:55","slug":"forex-daily-market-commentary-127","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/07\/forex-daily-market-commentary-127\/","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

Dollar performance was somewhat mixed during the Asia session. \t\t\tModest gains were made against the euro, but the yen continued to \t\t\tstrengthen with USDJPY breaking below the Sept 15 pre-intervention \t\t\tlow to new 15-year lows without a response from the BoJ. The AUD \t\t\tstole the show after a stellar employment report that sent AUDUSD \t\t\tmuch higher until it bounced off the July 2008 high. Friday’s \t\t\tpayrolls report is already coming into focus after a disappointing \t\t\tADP data print encouraged investors to continue to price in easing \t\t\texpectations. Gold made another new high at $1355.85\/oz. EURUSD \t\t\ttraded 1.3898-1.3940, USDJPY 82.82-83.07. The ADP estimate of \t\t\tprivate payrolls was -39k versus consensus +20k and the report \t\t\tsuggests some downside risk to September payrolls. However, ADP has \t\t\trecently been running much lower than the official Bureau of Labor \t\t\tStatistics (BLS) estimates and our economists do not see a \t\t\tparticularly precise signal of the monthly change in the official \t\t\tBLS data on private payrolls. They maintain their forecast of +100k \t\t\tfor private payrolls and -20k for overall payrolls, which will be \t\t\tdepressed by government layoffs (mainly temporary Census workers). \t\t\tUpcoming releases include initial jobless claims and Fed presidents \t\t\tHoenig and Fisher speak.
\nEUR<\/span><\/em><\/strong><\/p>\n

Positive German data and Fed QE fears helped the euro despite new \t\t\twarning signs for sovereigns. The European Commission cautioned that \t\t\t2006-09 Greek debt and deficit figures might be revised upwards. \t\t\tEurostat had already made this clear months ago, but yesterday’s \t\t\ttimely reminder seemed to catch the market off guard.
\nFitch downgraded Ireland’s credit rating to A+, the lowest among the \t\t\tthree major agencies. Fitch has Ireland on a negative outlook due to \t\t\teconomic and political concerns and it cited “exceptional” costs of \t\t\tthe government bank aid as part of the move.
\nWe are with consensus in expecting the ECB rate decision to be a \t\t\tnon-event. We do not expect surprises during the press conference. \t\t\tThe tone could continue to change slightly from dovish towards \t\t\tneutral, but would still be far too small to suggest any monetary \t\t\tpolicy change soon. It will be interesting if ECB President Trichet \t\t\tcomments on euro levels. He has not said much on it but EURUSD was \t\t\t1.2825 at the last ECB meeting
\n JPY<\/span><\/em><\/strong><\/p>\n

USDJPY hit 82.76 during the US session, breaching the \t\t\tpre-intervention Sept 15 low. But there was no sign of any official \t\t\taction. Prime Minister Kan says Japan will take decisive steps on FX \t\t\tas needed, and that he wants to cooperate appropriately with the G7 \t\t\ton FX. Then, intriguingly, Vice Finance Minister Igarashi said Japan \t\t\twill not join a “currency devaluation race” but could conduct \t\t\t“smoothing operations”. This comment does suggest a change in \t\t\tstrategy could be in the offing, especially given the approach of \t\t\tFriday’s G7 meeting.
\nThe IMF said the euro and yen were in line with medium-term \t\t\tfundamentals in its World Economic Outlook.
\n GBP<\/span><\/em><\/strong><\/p>\n

We expect the BoE decision to be a non-event, as policy should be \t\t\tunchanged. But the prospect of further QE has certainly reopened \t\t\twith increasing commentary by both Fed and BoE officials. Our UK \t\t\teconomist notes the MPC is now almost certain to be split three ways \t\t\tat this meeting but that split will only be known two weeks later \t\t\twhen the minutes are published on Oct 20, the same day the \t\t\tChancellor sets forth the government spending plans. We are cautious \t\t\ton sterling in the medium-term as we think fiscal austerity will \t\t\tkeep BoE policy accommodative.
\n CAD<\/span><\/em><\/strong><\/p>\n

The Ivey PMI surprisingly increased in September to 70.3, the \t\t\thighest since 2006. The gain was unexpected as officials had \t\t\tcautioned that the Canadian recovery might be tempered over the \t\t\tremainder of the year. USDCAD pushed down to a session low of \t\t\t1.0063, according to Bloomberg, before coming back to the 1.01 area, \t\t\tas QE fears in the US and the accompanying risk-seeking sentiment \t\t\tseem to have renewed investor interest in the CAD.<\/p>\n


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

The AUD climbed quickly after yet another stellar employment report. \t\t\tThe headline employment figure for September was very strong, rising \t\t\tby +49.5k (cons. +20k). The August figure was also revised up \t\t\tslightly to +31.6k from +30.9k. However, our Australian economics \t\t\tteam notes the leading indicators of jobs have peaked, which points \t\t\tto a moderation in jobs growth ahead. Nevertheless they continue to \t\t\texpect a +25bp hike to the cash rate in November.<\/p>\n

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


\n<\/span><\/strong> EURUSD next resistance at 1.4194.
\nEURUSD BULLISH Break of 1.3896 favours the extension of bull trend \t\t\ttowards 1.4194. Near-term support holds at 1.3799 ahead of 1.3637.
\nUSDJPY BEARISH Bearish trend remains intact; break of 82.88 exposes \t\t\t79.75. Resistance remains at 83.99 ahead of 85.40.
\nGBPUSD BULLISH Sustained break of 1.5999 and 1.6069 would expose \t\t\t1.6276. Support at 1.5670 ahead of 1.5503.
\nUSDCHF BEARISH Pressure on 0.9590 with scope for 0.9500 next. \t\t\tResistance at 0.9739 ahead of 0.9918 breakout low.
\nAUDUSD BULLISH Recovery today pressures 0.9850 key resistance; break \t\t\tof the level would expose 0.9905. Initial support defined at 0.9694 \t\t\tahead of 0.9542.
\nUSDCAD BEARISH Move below 1.0108 opens up the way towards 0.9931 \t\t\twith scope for 0.9820 next. Resistance comes in at 1.0167 ahead of \t\t\t1.0380.
\nEURCHF NEUTRAL Motion is sideways; while resistance is at 1.3467, \t\t\tsupport is defined at 1.3265 ahead of 1.3165.
\nEURGBP BULLISH After breaching 0.8738 upside potential targets \t\t\t0.8808 ahead of 0.8894. Support holds at 0.8689 ahead of 0.8563.
\nEURJPY BULLISH Expect gains to extend towards 116.68 and 119.33 \t\t\tnext. Near-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><\/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":"

Dollar performance was somewhat mixed during the Asia session. Modest gains were made against the euro, but the yen continued to strengthen with USDJPY breaking below the Sept 15 pre-intervention low to new 15-year lows…<\/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-13794","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13794","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=13794"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13794\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}