{"id":14506,"date":"2010-10-26T08:46:02","date_gmt":"2010-10-26T12:46:02","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14506"},"modified":"2010-10-26T08:46:02","modified_gmt":"2010-10-26T12:46:02","slug":"forex-daily-market-commentary-140","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/26\/forex-daily-market-commentary-140\/","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 largely range-bound throughout a quiet Asia session, \t\t\twith little news or economic data to act as drivers. Asia equity \t\t\tperformance has been mixed, although the S&P 500 closed fractionally \t\t\tahead. EURUSD traded 1.3908-1.3993, USDJPY 80.67-80.89. Kansas City \t\t\tFed President Hoenig again called for Fed rate hikes and claimed \t\t\tthat embarking on another round of QE would be a “dangerous gamble”. \t\t\tNew York Fed President Dudley said that he “would put very little \t\t\tweight” on what the market has priced in for the scale of further \t\t\teasing – the FOMC will decide what is best to satisfy its mandate. \t\t\tHe said that if the Fed sticks to its mandate, then the dollar will \t\t\tlook after itself. Existing home sales rose more than expected in \t\t\tSeptember at 10.0% and the upturn in contract closings, reflected in \t\t\tthe data, appears roughly consistent with the earlier improvements \t\t\tin mortgage applications and in initial sales contract signings in \t\t\tthe pending home sales index. Although the sales pace was still weak \t\t\ton a historical basis, sales appear to have bottomed. The current \t\t\tactivity index in the Dallas Fed manufacturing survey rose to 2.6 in \t\t\tOctober from -17.7 in September versus consensus -8.0. Other \t\t\tregional surveys had previously shown improvement or at least a \t\t\tfading of weakness. S&P\/Case Shiller, Conference Board consumer \t\t\tconfidence and the Richmond Fed manufacturing survey are due.
\nEUR<\/span><\/em><\/strong><\/p>\n

ECB Governing Council Member Weber said he saw no point in \t\t\tcommenting on euro levels though he was critical of excessive \t\t\tcurrency volatility. Weber said the quicker the European interbank \t\t\tmarket recovers, the quicker the ECB should be able to withdraw \t\t\tnonconventional measures and return to a more normal monetary \t\t\tpolicy. He also said current rates are appropriate but the ECB \t\t\tshould not keep rates too low for too long.
\nAt 24.4% y\/y (cons. 17.1%, prev. 11.2%) and 5.3% m\/m, Eurozone \t\t\tindustrial new orders for August were well above expectations. The \t\t\ttrend in new orders suggests that industrial activity may continue \t\t\tto hold up. The August numbers benefited from a lower euro but it \t\t\tremains to be seen how recent appreciation will affect external \t\t\tdemand.
\nEURUSD long positioning remains near this year’s extremes and we are \t\t\tstill cautious on chasing significant upside above 1.40.
\n JPY<\/span><\/em><\/strong><\/p>\n

Rhetoric levels from Japanese officials escalated over the past 24 \t\t\thours, despite the G20 pledge to “refrain from competitive \t\t\tdevaluation”. Finance Minister Noda said Monday’s FX moves were \t\t\tsomewhat one-sided, a term he used ahead of the Sept 15 act of \t\t\tintervention. He also noted that the G20 felt excessive FX moves \t\t\twere undesirable, a clear indication that he sees justification in \t\t\tthe text of the communiqu? for further intervention. Noda said he is \t\t\twatching FX markets with great interest and is ready to take \t\t\tdecisive action when needed.
\nEconomy Minister Kaieda warned that “excessive intervention should \t\t\tbe avoided but the government can be allowed to do so if currency \t\t\tmoves are volatile and one-sided”. Deputy Finance Minister Igarashi \t\t\talso suggested that FX intervention remains very much an option and \t\t\tsaid: “A surprise move would probably be effective to some extent. \t\t\tWe can’t make an announcement in advance that we will act, but, on \t\t\tthe other hand, we can’t say that we won’t act either.” He had \t\t\tearlier said that any intervention would be aimed at restraining \t\t\texcessive currency swings and the latest G20 language appeared to \t\t\tgive them the green light on that basis.
\n GBP<\/span><\/em><\/strong><\/p>\n

The advance estimate of Q3 GDP is expected lower at consensus 0.4% \t\t\tq\/q (UBSe 0.5%) after 1.2% previously. But on a y\/y basis, we expect \t\t\tto see an increase from the previous reading. We remain cautious on \t\t\tsterling given the government’s recently announced spending cuts.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong>
\nUSDJPY targets 79.75.
\nEURUSD BULLISH Remains constructive above 1.3637\/1.3559 support \t\t\tzone, trigger to bear trend. Resistance at 1.4159 ahead of 1.4373.
\nUSDJPY BEARISH The pair targets 79.75 with scope for 77.91 next. \t\t\tResistance at 81.49 yesterday’s high.
\nGBPUSD BULLISH Holds above 1.5606 keeping our focus on the upside. \t\t\tResistance at 1.5942 ahead of 1.6107.
\nUSDCHF BEARISH Recovery has scope for 0.9918 breakout low. Next big \t\t\tsupport below 0.9463 at 0.9225.
\nAUDUSD BULLISH Upside potential targets 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 Break of 1.0162 brings focus back to the downside \t\t\twith next support at 0.9981. Tough resistance at 1.0380\/1.0407 area.
\nEURCHF BULLISH Violation of 1.3665 leaves next resistance at 1.3924. \t\t\tNear-term support at 1.3456 ahead of 1.3265.
\nEURGBP BULLISH Momentum is positive; expect extension of gains \t\t\ttowards 0.9039 and 0.9150 next. Near-term support defined at 0.8773.
\nEURJPY BULLISH Need a break below 111.56 to trigger bear trend. \t\t\tUpside capped at 115.68.<\/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":"

The dollar was largely range-bound throughout a quiet Asia session, with little news or economic data to act as drivers. Asia equity performance has been mixed, although the S&P 500 closed fractionally ahead. EURUSD traded 1.3908-1.3993, USDJPY 80.67-80.89. Kansas City Fed President Hoenig<\/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-14506","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14506","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=14506"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14506\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}