{"id":14173,"date":"2010-10-18T08:47:28","date_gmt":"2010-10-18T12:47:28","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14173"},"modified":"2010-10-18T08:47:28","modified_gmt":"2010-10-18T12:47:28","slug":"forex-daily-market-commentary-134","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/18\/forex-daily-market-commentary-134\/","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

Further dollar strength came through during the Asia session, as the \t\t\tmarket continued to digest Fed Chairman Bernanke’s speech from \t\t\tFriday. EURUSD traded 1.3863-1.4006 and USDJPY traded 80.89-81.68. \t\t\tBernanke provided no new insights into the current state of the \t\t\tFOMC’s thinking, although he did see a case for “further action” and \t\t\tnoted that measures of underlying inflation are “trending \t\t\tdownwards”. But the absence of detail on the likely size and timing \t\t\tof any future asset purchases proved to be a significant source of \t\t\tsupport for the dollar, and US 10y yields ultimately closed 8bp \t\t\thigher. Our US economics team still expects a new round of US \t\t\tTreasury purchases will be announced on Nov. 3, composed of $200 bn \t\t\tof purchases per quarter, with a maximum five-quarter program size \t\t\tof $980 bn. Chicago Fed President Evans, who is due to become an \t\t\tFOMC voter in January, said that the US economy is in a “bona fide \t\t\tliquidity trap” and that much more policy accommodation is \t\t\tappropriate “today”. Evans noted that, given the circumstances, \t\t\t“targeting a higher price-level path in an effective, disciplined \t\t\tand limited fashion” could be justified. The US Treasury decided to \t\t\tdelay the release of the latest currency report until after the \t\t\tupcoming G20 meetings. Retail sales rose +0.6% in September (cons. \t\t\t+0.4%) while the August and July readings were revised up \t\t\tsignificantly. The Univ. of Michigan consumer sentiment index \t\t\tslipped to 67.9 (cons. 68.9), while core CPI was flat m\/m in \t\t\tSeptember (cons. +0.1% m\/m). Industrial production is due and our US \t\t\teconomists expect it turned slightly negative in September..
\nEUR<\/span><\/em><\/strong><\/p>\n

ECB President Trichet said that a majority of the ECB Governing \t\t\tCouncil is still in favour of keeping the sovereign bond purchasing \t\t\tprogram in place. Referring to the ECB’s mandate for price stability \t\t\the said that raising the inflation target would be “disastrous”, and \t\t\tthat he was also “completely against” the idea of raising inflation \t\t\texpectations. Again, he called on Eurozone governments to vigorously \t\t\timplement fiscal reforms.
\nEU Economic and Monetary Affairs Commissioner Rehn said that the CNY \t\t\tis “very undervalued” and called on China to allow it to strengthen \t\t\t“broadly”. Earlier, US Treasury Secretary Geithner said that China’s \t\t\tactions to accelerate the yuan’s rise had been recognised, but that \t\t\tit was important for this course to be sustained. The IMF announced \t\t\tthat a conference of central bankers hosted by the PBoC will take \t\t\tplace in Shanghai on Monday to continue with “the ongoing \t\t\tinternational examination of the policy challenges posed by the \t\t\tglobal financial crisis\u201d.
\nEurogroup Chairman Juncker said it would be premature to discuss an \t\t\textension to Greece’s EU\/IMF bailout plan, and that Greece has no \t\t\talternative but to implement the terms of the original plan.
\n JPY<\/span><\/em><\/strong><\/p>\n

Economics Minister Kaieda said that Japan will study how to increase \t\t\tthe quantity of international trade that is invoiced in yen, so as \t\t\tto help better immunize Japanese exporters from currency \t\t\tfluctuations.
\n GBP<\/span><\/em><\/strong><\/p>\n

Referring to the BoE’s asset purchase facility, MPC Member Fisher \t\t\tsaid it is not clear whether the next policy step will be “to sell \t\t\tthe assets back or to buy more”. Also, he dismissed the idea of \t\t\tre-investing Gilt coupon payments received to date as “an \t\t\tunnecessary complication at this stage”. He reiterated comments made \t\t\tby Governor King in June that, when the bank eventually decides to \t\t\ttighten policy, it will most likely raise rates first and begin Gilt \t\t\tsales some time later.
\nFischer’s remarks echo those of MPC Member Miles who last week was \t\t\talso unsure whether the next policy step would be to tighten or to \t\t\tease further. So far, only MPC Member Posen has publicly called for \t\t\tfurther Gilt purchases now. Our UK economist expects the minutes of \t\t\tthe Oct. 7 policy meeting, due for release on Wednesday, will show \t\t\tthat Posen voted in favour of such action. We remain cautious on \t\t\tsterling as fiscal austerity will likely hold back economic growth \t\t\tand keep monetary policy accommodative.
\n AUD<\/span><\/em><\/strong><\/p>\n

Australian Treasurer Swan warned against trying to prevent the AUD \t\t\tmaking further gains against the US dollar. He said attempting to \t\t\t“artificially depress the value of the currency would be \t\t\tcounterproductive” as to do so would risk pushing inflation and \t\t\tinterest rates higher.<\/p>\n


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


\n<\/span><\/strong> AUDUSD clears 1.000 psychological resistance.
\nEURUSD BULLISH Pullback from 1.4159 targets 1.3775, reaction low. \t\t\tHowever, broader trend is bullish, next resistance at 1.4373 \t\t\tFibonacci level.
\nUSDJPY BEARISH Sell continues to rally towards 79.75, scope for \t\t\t77.91 next. Resistance at 81.85 ahead of 83.03.
\nGBPUSD BULLISH Rise through 1.6018 favors extension of the uptrend \t\t\ttowards 1.6201 ahead of 1.6379. Support at 1.5888 ahead of 1.5670.
\nUSDCHF BEARISH Outlook is bearish; break below 0.9500 exposes \t\t\t0.9225. Resistance at 0.9729 ahead of 0.9918 breakout low.
\nAUDUSD BULLISH After breaching 1.000 marginally, pullback eyes \t\t\t0.9709 support. Expect gains to extend towards 1.0166.
\nUSDCAD BEARISH Next support below 0.9981\/31 defined at 0.9820. \t\t\tRecovery clears 1.0184 initial resistance thus exposing 1.0273.
\nEURCHF BULLISH Stalled in front of 1.3494; break of the level would \t\t\texpose 1.3665. Initial support lies at 1.3265 ahead of 1.3072.
\nEURGBP BULLISH Currently holds resistance at 0.8840 ahead of 0.8894 \t\t\tand 0.9039. Support holds at 0.8689 ahead of 0.8563.
\nEURJPY BULLISH As long as support at 111.77 holds, expect recovery \t\t\ttowards 115.68 ahead of 116.68 Fibonacci 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","protected":false},"excerpt":{"rendered":"

Further dollar strength came through during the Asia session, as the market continued to digest Fed Chairman Bernanke’s speech from Friday. EURUSD traded 1.3863-1.4006 and USDJPY traded 80.89-81.68. Bernanke provided no new insights into the current state of the FOMC’s thinking<\/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-14173","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14173","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=14173"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14173\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}