{"id":13957,"date":"2010-10-12T08:55:15","date_gmt":"2010-10-12T12:55:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13957"},"modified":"2010-10-12T08:55:15","modified_gmt":"2010-10-12T12:55:15","slug":"forex-daily-market-commentary-130","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/12\/forex-daily-market-commentary-130\/","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 continued to grind modestly higher during the Asia \t\t\tsession, the move having first got underway during Monday’s holiday \t\t\tin the US. There were no major releases, but Asian equities were \t\t\tsignificantly weaker. EURUSD traded 1.3845-1.3901, USDJPY \t\t\t81.85-82.36. We have changed our one-month forecasts for EURUSD, \t\t\tUSDJPY, EURJPY, EURGBP, USDCHF, AUDUSD and NZDUSD in the wake of our \t\t\teconomists now expecting the Fed to announce quantitative easing in \t\t\tthe form of a programme of bond purchases on the order of $100-200 \t\t\tbn a quarter. We have however retained our three-month currency \t\t\tviews, as we believe the market has already priced in substantial \t\t\tnew Treasury purchases by the Fed, meaning that the eventual \t\t\tdecision risks being a disappointment, which would likely limit any \t\t\tpost-announcement dollar weakness.
\nFed Vice Chairman Janet Yellen made her first remarks after being \t\t\tsworn in but did not directly address the economic outlook or \t\t\tupcoming policy decisions. She did say, however, that policymakers \t\t\tshould be cautious as accommodative policies could spark a build-up \t\t\tin leverage and risk-taking. The September FOMC minutes are due – no \t\t\tsurprises are expected, but these should at least provide a fuller \t\t\tpicture of the discussions surrounding the surprisingly dovish Sept \t\t\t21 policy statement.
\nEUR<\/span><\/em><\/strong><\/p>\n

ECB Governing Council member Quaden said excessive FX volatility \t\t\tneeds to be avoided by common efforts at the global level. He also \t\t\tsaid the ECB is not pre-committed to making any decisions on exit \t\t\tstrategies and that there are no plans right now to change \t\t\tcollateral rules in order to stop banks refinancing exclusively at \t\t\tthe ECB.
\nCPI data in Germany is due. At 0.0% (cons. 0.3%, prev. 0.9%) August \t\t\tFrench industrial output was released below expectations. In \t\t\tcontrast, seasonal adjusted Italian industrial output was 1.3% \t\t\t(cons. 0.0%, prev. \t\t\t0.1%).
\n JPY<\/span><\/em><\/strong><\/p>\n

Finance Minister Noda repeated that he is watching FX markets with \t\t\tgreat interest, and said Japan is willing to take decisive steps, \t\t\tincluding FX intervention, if needed. Economics Minister Kaieda \t\t\trepeated comments that Noda made over the weekend, saying that \t\t\tJapan’s explanation for its FX policy met with a certain \t\t\tunderstanding at the weekend IMF meetings. Given the likelihood that \t\t\tUS yields will remain under pressure in the run-up to the FOMC’s \t\t\tNovember policy announcement, we lowered our 1m USDJPY forecast to \t\t\t80 from 85. Our US economists expect that any Fed easing at that \t\t\tmeeting will likely disappoint the market in terms of its size and \t\t\tambition. Recognizing this, as well as the scope for further BoJ \t\t\teasing, we keep our 3m target unchanged at 85.
\n GBP<\/span><\/em><\/strong><\/p>\n

CPI is expected to remain unchanged at 3.1% y\/y, while core CPI and \t\t\tRPI are expected to dip slightly. The m\/m CPI consensus is 0.0% \t\t\tversus 0.5% previously. While we will not see how the latest MPC \t\t\tvote breaks down until Oct 20, any upside CPI surprises could \t\t\tintensify differences of opinion ahead of the UK spending review.
\nWe remain cautious on sterling as fiscal austerity will dampen \t\t\tgrowth and keep monetary policy accommodative, particularly \t\t\tfollowing recent comments by Prime Minster Cameron and Finance \t\t\tMinister Osborne. Cameron said that there are risks for the economy \t\t\tand that monetary policy was the best lever for support.<\/p>\n


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

Business confidence in September was broadly unchanged at 10 (prev. \t\t\t11), while business conditions rose to 7 from 5 in August. Our \t\t\tanalysts note that there is nothing in the data that ought to change \t\t\tthe RBA’s expectation that growth ahead will be at, or above, trend.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> USDCHF look for a break below 0.9500.
\nEURUSD BULLISH Violation of 1.4029 will trigger further acceleration \t\t\tto 1.4194. Near-term support holds at 1.3799 ahead of 1.3637.
\nUSDJPY BEARISH Trend is bearish; initial support at 81.39 ahead of \t\t\t79.75. Resistance remains at 83.03 ahead of 83.99.
\nGBPUSD BULLISH Sustained break of 1.6018\/69 would expose 1.6276. \t\t\tSupport at 1.5670 ahead of 1.5503.
\nUSDCHF BEARISH Look for a break below 0.9500 which will expose \t\t\t0.9078 next. Resistance at 0.9739 ahead of 0.9918 breakout low.
\nAUDUSD BULLISH Upside potential held at 0.9918 below 1.000 \t\t\tpsychological resistance next. Support at 0.9709 reaction low.
\nUSDCAD BEARISH As long as resistance at 1.0380 holds, expect losses \t\t\tto target 1.0063 with scope for 0.9931 and 0.9820 next.
\nEURCHF BULLISH Trend is bullish; break of 1.3494 would expose 1.3697 \t\t\tmeasured objective. Support at 1.3265.
\nEURGBP BULLISH Stalled in front of 0.8808 with next resistance at \t\t\t0.8894. Support holds at 0.8689 ahead of 0.8563.
\nEURJPY BULLISH Pullback from 115.68 eyes 113.26 support, but overall \t\t\toutlook is bullish with next resistance at 116.68 and 119.33 next.<\/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 continued to grind modestly higher during the Asia session, the move having first got underway during Monday’s holiday in the US. There were no major releases, but Asian equities were significantly weaker.<\/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-13957","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13957","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=13957"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13957\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}