{"id":13979,"date":"2010-10-13T09:25:49","date_gmt":"2010-10-13T13:25:49","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13979"},"modified":"2010-10-13T09:25:49","modified_gmt":"2010-10-13T13:25:49","slug":"forex-daily-market-commentary-131","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/13\/forex-daily-market-commentary-131\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at \t\t\t0800 GMT (EDT + 0400)<\/strong><\/p>\n

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

The dollar continued to weaken against the euro during the Asia \t\t\tsession in the wake of the FOMC minutes. EURUSD traded 1.3838-1.3979 \t\t\tand USDJPY traded 81.67-82.01. The minutes themselves kept \t\t\texpectations alive that another round of quantitative easing might \t\t\tbegin as early as November. Several members considered it \t\t\tappropriate “to take action soon”, but the minutes also made it \t\t\tclear that any additional easing would “depend upon future \t\t\tinformation about the economic situation and outlook.” Market \t\t\tattention also focused on the presence of New York Fed economist \t\t\tEggertsson at the meeting. Eggertsson’s field of expertise is the \t\t\tconduct of monetary policy when interest rates are near zero. His \t\t\tattendance at this time is noteworthy given he last appeared at an \t\t\tFOMC meeting in December 2008, the meeting where the original MBS \t\t\tpurchase program was launched.
\nEquities also found some support with the S&P500 closing +0.4% \t\t\thigher. The minutes were vague on what form any additional easing \t\t\tshould take, but participants were said to have “focused primarily \t\t\ton further purchases of longer-term Treasury securities and on \t\t\tpossible steps to affect inflation expectations.” Possible \t\t\tstrategies to affect short-term inflation expectations included \t\t\t“providing more detailed information about the rates of \t\t\tinflation\u2026consistent with its dual mandate, targeting a path for the \t\t\tprice level\u2026and targeting a path for the level of nominal GDP.” \t\t\tAttention will now likely focus on Fed Chairman Bernanke’s speech on \t\t\tmonetary policy which is scheduled for Friday.
\nEUR<\/span><\/em><\/strong><\/p>\n

ECB Governing Council Member Weber repeated his opposition to the \t\t\tECB’s sovereign bond buying program, saying there is no evidence the \t\t\tpurchases have had any significant impact on average Eurozone \t\t\tyields. He said the program “should now be phased out permanently”. \t\t\tAlthough he stressed the current policy stance is appropriate given \t\t\tthat inflation risks are low, he warned that the risks from exiting \t\t\ttoo late are greater than exiting too early. On the question of how \t\t\tthe exit strategy should be sequenced, Weber said that, “in \t\t\tprinciple”, rate hikes could begin before the phasing out of \t\t\tnon-standard measures had finished. He repeated the now familiar ECB \t\t\tposition that it is not the job of the central bank to provide \t\t\tlong-term liquidity support to the banking system, and invited \t\t\tnational governments and bank shareholders instead to provide the \t\t\tcash the banks need.
\nECB Governing Council member Noyer said that price stability is \t\t\tstill not in danger, and that upside risks are very limited. \t\t\tElsewhere, ECB Governing Council member Nowotny said that there is \t\t\tno danger of inflation or deflation, and that the idea of a currency \t\t\twar is absurd. However, ECB President Trichet was more cautious and \t\t\tcalled on the international community to say “no to protectionism \t\t\tand no to beggar-thy-neighbour policies”.
\n JPY<\/span><\/em><\/strong><\/p>\n

Finance Minister Noda repeated that Japan reserves the right to \t\t\tintervene in FX markets when needed. BoJ Governor Shirakawa said \t\t\tthat he is watching FX markets with great interest and the BoJ could \t\t\textend the new asset purchase facility it announced at the latest \t\t\tpolicy meeting depending on the needs of the economy. The facility \t\t\twas originally intended to hold up to \u00a55trn in new assets, \u00a53.5trn \t\t\tof which may be JGBs.
\n GBP<\/span><\/em><\/strong><\/p>\n

UK consumer confidence fell sharply in September to 53 (cons. 59, \t\t\tprev. 62). This was the weakest reading in 18 months.
\nMPC Member Miles said that the outlook for growth and inflation \t\t\tremains exceptionally uncertain and that quantitative easing remains \t\t\ta potentially powerful tool. He added that it is not yet obvious in \t\t\twhat direction monetary policy will next be adjusted, but said the \t\t\tBoE may yet come to use quantitative easing. \t\t\tCable fell sharply in response to the latter remark.
\nYesterday, CPI fell slightly in September, coming in at 0.0% m\/m \t\t\t(cons. +0.1%, prev. +0.5%), and at 3.1% y\/y (cons. 3.1%, prev. \t\t\t3.1%). Our economists note that the CPI release is in line with the \t\t\tBoE’s inflation report and should therefore have no material impact \t\t\ton the MPC’s immediate policy decisions. We are cautious on sterling \t\t\tas fiscal austerity will likely dampen growth and keep monetary \t\t\tpolicy accommodative.<\/p>\n


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

Consumer confidence stayed firm in October, rising 3.3% m\/m to \t\t\t117.0. Yesterday we learned business confidence only fell very \t\t\tslightly in September. Both readings support our analysts’ \t\t\texpectations for an RBA rate hike at the November meeting.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> EURGBP 0.8894 next resistance.
\nEURUSD BULLISH Focus is on 1.4029 break of which would open up the \t\t\tway towards 1.4194. Support at 1.3775.
\nUSDJPY BEARISH Trend is bearish; initial support at 81.39 ahead of \t\t\t79.75. Resistance holds at 83.03 ahead of 83.99.
\nGBPUSD BULLISH Move above 1.6018\/69 would trigger further gains \t\t\ttowards 1.6276. Support 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 Pressure on 1.3265 ahead of 1.3072, but focus is on \t\t\tupside trigger defined at 1.3494 ahead of 1.3665.
\nEURGBP BULLISH Break of 0.8808 exposes 0.8894 and 0.9039. Support \t\t\tholds at 0.8689 ahead of 0.8563.
\nEURJPY BULLISH Clearance of 113.26 exposed 110.66 support, but \t\t\toverall outlook is bullish with resistance at 115.68 ahead of 116.68 \t\t\tFibonacci resistance.<\/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


\n<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The dollar continued to weaken against the euro during the Asia session in the wake of the FOMC minutes. EURUSD traded 1.3838-1.3979 and USDJPY traded 81.67-82.01. The minutes themselves kept<\/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-13979","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13979","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=13979"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13979\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}