{"id":13875,"date":"2010-10-08T09:42:46","date_gmt":"2010-10-08T13:42:46","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13875"},"modified":"2010-10-08T09:42:46","modified_gmt":"2010-10-08T13:42:46","slug":"forex-daily-market-commentary-128","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/08\/forex-daily-market-commentary-128\/","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 started the session significantly weaker before investors \t\t\tpared back positions ahead of Friday’s payrolls report. The ECB and \t\t\tBoE decisions provided no surprises and Fed easing expectations \t\t\tremained a weight on the dollar as EURUSD breached 1.40. But then it \t\t\tsharply dropped back and the dollar made up a lot of lost ground and \t\t\tthen some versus most of the G10. Gold set an all-time high around \t\t\t$1365 before settling back to $1334.75 at the time of writing and \t\t\tequities finished flat. EURUSD traded 1.3857-1.4027, USDJPY \t\t\t82.12-83.03.<\/p>\n

Kansas City Fed President Hoenig, the lone FOMC dissenter in 2010, \t\t\treiterated his opposition to further easing measures as he is \t\t\tconcerned on long-term implications of current policy. Dallas Fed \t\t\tPresident Fisher said investors should not assume the Fed is on the \t\t\tpath for further easing and he is doubtful on the effectiveness of \t\t\tadditional asset purchases. Fisher will be a FOMC voter in 2011. \t\t\tComments aside, the upcoming payrolls print will be significant for \t\t\tthe Fed outlook. Our analysts expect +100k on private payrolls and \t\t\t-20 on headline with no change in the unemployment rate. If the \t\t\tpayroll report comes in broadly in line with consensus, then \t\t\tinvestors’s pricing in of further Fed easing is unlikely to change \t\t\tdramatically and the dollar will remain under pressure. But a strong \t\t\tpositive surprise could boost Treasury yields and benefit the dollar \t\t\tand dollar-bloc currencies, given their correlation with US \t\t\tequities. A negative surprise will further weaken the dollar versus \t\t\tthe yen and the Swiss franc via lower Treasury yields.
\nEUR<\/span><\/em><\/strong><\/p>\n

ECB President Trichet did not offer any new insights in the press \t\t\tconference following the unchanged policy rate. His comments largely \t\t\techoed his September remarks and he continued to sound cautious as \t\t\tuncertainty persists. Trichet said improvement in liquidity \t\t\tconditions and Euriobr rates was a sign of normalization, rather \t\t\tthan any policy signal, which our economists had anticipated he \t\t\twould say. The only comment Trichet offered on FX was that he \t\t\topposed excess volatility and disorderly moves. His lack of opinion \t\t\ton current euro levels gave an implicit signal that the ECB is not \t\t\tat the point yet where currency levels are concerning to them.
\nThe IMF’s Strauss-Kahn said that a sluggish European recovery is a \t\t\tconcern and their base case does not call for a double-dip in the \t\t\tUS.
\n GBP<\/span><\/em><\/strong><\/p>\n

The BoE decision was a non-event as expected and investor focus now \t\t\tshifts to the release of the MPC minutes on October 20 to see how \t\t\tthe votes panned out. That same day the Chancellor of the Exchequer \t\t\twill provide details of the government spending plans. \t\t\tWe remain cautious on sterling ahead of then.
\nAt 0.3% m\/m and 6.0% y\/y, manufacturing output was better than \t\t\texpected and industrial production was inline with consensus at 0.3% \t\t\tm\/m and 4.2% y\/y. Our economists note PMI and CBI point to continued \t\t\tgrowth in manufacturing. Halifax house prices declined more than \t\t\texpected on a monthly basis in September at -3.6%.
\n CAD<\/span><\/em><\/strong><\/p>\n

Labour data is due in Canada. The net change in employment is \t\t\texpected to dip to 10.0k from 35.8k and the unemployment rate is \t\t\tforecast to remain at 8.1%. Even though nonfarm payrolls in the US \t\t\twill dictate USDCAD movements, the Canadian data will influence \t\t\trelative value via the non-USD crosses as the disappointing building \t\t\tpermits did at -9.2% m\/m versus consensus -2.0% m\/m.<\/p>\n

<\/p>\n

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


\n<\/span><\/strong> EURUSD 1.3799 Support.
\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 1.6069 would expose 1.6276. \t\t\tSupport at 1.5670 ahead of 1.5503.
\nUSDCHF BEARISH Next support below 0.9500 lies at 0.9078. Resistance \t\t\tat 0.9739 ahead of 0.9918 breakout low.
\nAUDUSD BULLISH Sharp rise through 0.9850 and 0.9905 exposes 1.000 \t\t\tpsychological resistance. Support comes in at 0.9773.
\nUSDCAD BEARISH Recovery has resistance at 1.0380. Violation of \t\t\t1.0108 shifts focus to 0.9931 with scope for 0.9820 next.
\nEURCHF NEUTRAL Pressure on 1.3482 Fibonacci resistance, with scope \t\t\tfor 1.3697 measured objective. Support at 1.3265.
\nEURGBP BULLISH Pressure on 0.8808 with next resistance at 0.8894. \t\t\tSupport holds at 0.8689 ahead of 0.8563.
\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 113.89 ahead of 111.47.<\/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":"

The dollar started the session significantly weaker before investors pared back positions ahead of Friday’s payrolls report. The ECB and BoE decisions provided no surprises and Fed easing expectations remained a weight on the dollar<\/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-13875","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13875","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=13875"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13875\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}