{"id":14221,"date":"2010-10-19T07:59:32","date_gmt":"2010-10-19T11:59:32","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14221"},"modified":"2010-10-19T07:59:32","modified_gmt":"2010-10-19T11:59:32","slug":"forex-daily-market-commentary-135","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/19\/forex-daily-market-commentary-135\/","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 was volatile during the Asia session, but supportive \t\t\tcomments by Treasury Secretary Geithner ultimately helped it recover \t\t\tsome ground. Geithner said no country can devalue its way to \t\t\tprosperity and that the US will not engage in such practice. He \t\t\tadded that he does not see a time in our lifetime when the dollar \t\t\twill cease to be the world’s key reserve currency. EURUSD traded \t\t\t1.3918-1.4004, USDJPY 81.21-81.47. Equities closed positive as a \t\t\tmajor US financial institution reported good earnings despite \t\t\tmissing on revenues. Treasury yields moved lower and gold and oil \t\t\tall gained as Atlanta Fed President Lockhart, who is not a FOMC \t\t\tvoter until 2012, said he may support more quantitative easing. But \t\t\tDallas Fed President Fisher again said the Fed cannot help the \t\t\teconomy on its own and said QE2 is not a done deal. In data, \t\t\tindustrial production for September was as we expected but weaker \t\t\tthan consensus at -0.2%. However, other manufacturing data have been \t\t\tmore constructive. The housing market index rose more than expected \t\t\tin October and other housing indicators have also been positive this \t\t\tmonth. Several Fed officials are due to speak though we have heard \t\t\tfrom most of them and do not expect any significant deviations from \t\t\tprevious stances. But we could finally hear Fed Governor Elizabeth \t\t\tDuke’s public opinions on easing prospects. We also get housing \t\t\tstarts and building permits data and two major US banks report \t\t\tearnings.
\nEUR<\/span><\/em><\/strong><\/p>\n

Eurogroup Chairman Juncker said finance ministers discussed FX rates \t\t\tand that FX volatility has negative effects on a global scale. He \t\t\treiterated that FX rates must reflect economic fundamentals. Juncker \t\t\talso said he is confident that Greece will meet its deficit targets.
\nGerman ZEW data should show an increase in the current situation \t\t\tindex but the economic sentiment portion is expected to drop. While \t\t\tour European economists think that recent price action in EURUSD has \t\t\tnot been enough to prompt them to cut GDP estimates, we think recent \t\t\teuro levels could weigh on sentiment indexes like the ZEW.
\n AUD<\/span><\/em><\/strong><\/p>\n

The RBA minutes from the Oct. 5 policy meeting struck a hawkish \t\t\tnote. Although the AUD initially strengthened, a broad-based dollar \t\t\trevival subsequently took AUDUSD lower again. The text revealed that \t\t\tthe decision to pause was “finely balanced” and that a case could \t\t\thave been made to increase the cash rate at that meeting. Instead, \t\t\tthe board opted to wait, pending the evaluation of further \t\t\tinformation “at the next meeting”. Clearly the Q3 CPI estimate due \t\t\ton Oct 27 is likely to be a key input to the final decision. Most \t\t\tsignificantly, it was noted that the stronger AUD, which had risen \t\t\t4% since the previous meeting, had already caused “a tightening of \t\t\tdomestic financial conditions”. Our Australian economists still \t\t\texpect a rate hike in November, and we expect AUD to remain \t\t\tsupported as investors look for yield.
\nTreasurer Swan is still opposed to FX intervention, both in general \t\t\tand in the case of the AUD in particular. He said that greater AUD \t\t\tflexibility is key to global rebalancing, and that Australia will be \t\t\ta big loser if protectionism takes hold.
\n CAD<\/span><\/em><\/strong><\/p>\n

We think the BoC will keep the policy rate unchanged due to recent \t\t\tdovish commentary by BoC officials, disappointing domestic data and \t\t\tpersistent Fed easing expectations. All economists surveyed by \t\t\tBloomberg are also looking for no change, which will keep the CAD \t\t\trelatively contained versus the other dollar-bloc currencies.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> USDCHF little support till 0.9225.
\nEURUSD BULLISH Pullback from 1.4159 eyes 1.3775, reaction low. \t\t\tHowever, broader trend is bullish, next resistance at 1.4373 \t\t\tFibonacci level.
\nUSDJPY BEARISH Stalled at 80.88; next support at 79.75 ahead of \t\t\t77.91. Resistance at 81.85 ahead of 83.03.
\nGBPUSD BULLISH While support at 1.5606 holds, view pullback as \t\t\tcorrection. Upside capped at 1.6107 ahead of 1.6201.
\nUSDCHF BEARISH There is little support till 0.9225. Resistance at \t\t\t0.9729 ahead of 0.9918 breakout low.
\nAUDUSD BULLISH Move above 1.0004 would expose 1.0166. Initial \t\t\tsupport defined at 0.9709 ahead of 0.9542, reaction low.
\nUSDCAD BEARISH Recovery eyes 1.0273; but overall model is bearish. \t\t\tSustained break of 0.9981\/31 region would expose 0.9820 ahead of \t\t\t0.9712.
\nEURCHF BULLISH Upside potential holds below 1.3494; break of the \t\t\tlevel would expose 1.3665. Initial support lies at 1.3265 ahead of \t\t\t1.3072.
\nEURGBP BULLISH Recent pullback pressured 0.8689 support but focus is \t\t\tback on the upside with initial resistance defined at 0.8840 ahead \t\t\tof 0.8894 and 0.9039.
\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><\/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":"

We think the BoC will keep the policy rate unchanged due to recent dovish commentary by BoC officials, disappointing domestic data and persistent Fed easing expectations. All economists surveyed by Bloomberg are also looking for no<\/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-14221","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14221","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=14221"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14221\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}