{"id":14318,"date":"2010-10-22T08:40:41","date_gmt":"2010-10-22T12:40:41","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14318"},"modified":"2010-10-22T08:40:41","modified_gmt":"2010-10-22T12:40:41","slug":"forex-daily-market-commentary-138","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/22\/forex-daily-market-commentary-138\/","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 clawed back some lost ground during the early part of the \t\t\tAsia session, but risk currencies found a bid on remarks from US \t\t\tTreasury Secretary Geithner. He said that G20 countries should cap \t\t\ttheir external imbalances at a particular, though unspecified, share \t\t\tof GDP. It appears that the aim of any such measure would be to \t\t\tforce export-dependent economies to focus instead on stimulating \t\t\tdomestic demand, and this should in theory reduce local objections \t\t\tto currency appreciation. Geithner conceded that countries with \t\t\tlarge raw material exports could be made exempt from such a rule. \t\t\tThis proposed exemption would appear to favour Australia, and should \t\t\tbe AUD supportive. EURUSD traded in a range of 1.3889-1.3966, and \t\t\tUSDJPY stayed in a range of 81.14-81.37. Asian equities are slightly \t\t\tfirmer at the time of writing and US equities earlier closed \t\t\tfractionally ahead. FOMC voter and St. Louis Fed President Bullard \t\t\tsaid that “we are not here to ratify what the markets think” \t\t\tsuggesting there was no pre-commitment on the November 3 FOMC \t\t\tdecision. However, Bullard said that if the Fed did go ahead with \t\t\tfurther quantitative easing, he would favor asset purchases in \t\t\tincrements of $100bn. On the data front, initial jobless claims fell \t\t\tfrom 475k to 452k for the most current reading. The Philadelphia Fed \t\t\tIndex rose to 1.0 from -0.7 previously. The growth-related details \t\t\tof the survey were slightly more positive, with improvement in \t\t\temployment and shipments indices. New orders remained soft, albeit \t\t\tless weak than in September. Philadelphia Fed President Plosser is \t\t\tdue to speak at a seminar on regulatory reform. The G20 finance \t\t\tministers and central bank governors are due to convene in Korea.
\nEUR<\/span><\/em><\/strong><\/p>\n

Germany’s PMI manufacturing was far stronger than expected in \t\t\tOctober, coming in at 56.1 vs. 54.6. Services PMI was also strong at \t\t\t56.6 vs. 54.9 expected. This has managed to lift the corresponding \t\t\tEurozone figures too, and has provided an extra layer of support for \t\t\tthe EUR.
\nAhead, the German IFO is due to be released. Our European economists \t\t\texpect the business climate index to weaken slightly to 105.1 (prev. \t\t\t \t\t\t \t\t\t106.8).
\n GBP<\/span><\/em><\/strong><\/p>\n

UK retail sales fell by 0.2% in Sept after a downwardly revised \t\t\t-0.7% decline (-0.5% previously), lower than market expectations of \t\t\ta 0.4% increase. This is the 2nd month retail sales have dropped. \t\t\tThe official data stands in contrast to some of the major surveys \t\t\tsuch as the CBI, BRC and the BoE, which continue to point to retail \t\t\tsales volume growth. We expect retail sales volume growth to \t\t\tstrengthen in Q4, ahead of the January VAT hike.
\n JPY<\/span><\/em><\/strong><\/p>\n

Finance Minister Noda described as “unrealistic” US Treasury \t\t\tSecretary Geithner’s proposals to limit the size of a country’s \t\t\tcurrent account balance. He added that the G20 meeting is unlikely \t\t\tto discuss the currency policies of any individual country. BoJ \t\t\tGovernor Shirakawa said he would not comment on the capital control \t\t\tmeasures of any individual country. He added that China’s recent \t\t\trate hike will promote sustainable growth.
\n CHF<\/span><\/em><\/strong><\/p>\n

Swiss trade data were much firmer than expected, coming in at \t\t\tCHF1.69bn in surplus vs. CHF1.20bln expected. However, this was \t\t\tlargely due to a sharp drop in imports as exports also dipped by \t\t\t3.8% on the month.
\nThe SNB also announced mass diversification of their assets in Q2, \t\t\tbuying over $10bln, \u00a51tln, CAD5bln and CHF6bln in other currencies.
\n CAD<\/span><\/em><\/strong><\/p>\n

Ahead, Canada CPI readings for September will be released as will \t\t\tretail sales for August.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> EURCHF 1.3665 next resistance.
\nEURUSD BULLISH Need a break below 1.3637\/1.3559 support zone to \t\t\ttrigger the bear trend. Resistance at 1.4159 ahead of 1.4373.
\nUSDJPY BEARISH While resistance holds at 83.03, expect extension of \t\t\tdownleg towards 79.75 ahead of 77.91.
\nGBPUSD BULLISH Remains constructive above 1.5606 keeping our focus \t\t\ton the upside. Resistance at 1.5942 ahead of 1.6107.
\nUSDCHF BEARISH Rise through 0.9729 exposes 0.9918 breakout low. Next \t\t\tbig support below 0.9463 at 0.9225.
\nAUDUSD BULLISH Upside gains held at 1.0004; move above the level \t\t\twould expose 1.0166. Support defined at 0.9662 ahead of 0.9542 \t\t\treaction low.
\nUSDCAD BEARISH Tough resistance in 1.0380\/1.0407 area. Initial \t\t\tsupport at 1.0162 ahead of 0.9981.
\nEURCHF BULLISH Climb through 1.3494 clears the way for a run towards \t\t\t1.3665 and 1.3924 next. Near-term support at 1.3265 ahead of 1.3072.
\nEURGBP BULLISH Sudden recovery through 0.8840 and 0.8894 exposes \t\t\t0.9039 next. Near-term support defined at 0.8773.
\nEURJPY BULLISH Focus is back on the upside; expect gains to target \t\t\t115.68 and 116.68 next.<\/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":"

By GCI Forex Research Fundamental Outlook at 0800 GMT (EDT + 0400) USD The dollar clawed back some lost ground during the early part of the Asia session, but risk currencies found a bid on remarks from US Treasury Secretary Geithner. He said that G20 countries should cap their external imbalances at a particular, though … <\/p>\n

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