{"id":14540,"date":"2010-10-27T08:45:31","date_gmt":"2010-10-27T12:45:31","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14540"},"modified":"2010-10-27T08:45:31","modified_gmt":"2010-10-27T12:45:31","slug":"forex-daily-market-commentary-141","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/27\/forex-daily-market-commentary-141\/","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 find support during the Asia session after a \t\t\tslightly weaker than expected CPI report from Australia, and a \t\t\tnewspaper article which said the FOMC would likely ease in \t\t\t“measured” fashion. EURUSD traded 1.3802-1.3878, USDJPY 81.32-81.76. \t\t\tAlthough the scope of any further Fed easing remains a significant \t\t\tunknown, consecutive days of decent US data have probably encouraged \t\t\tinvestors to scale back some short dollar positions. Comments by New \t\t\tYork Fed President Dudley overnight may also have helped. While he \t\t\tsupports further easing, he said, “I would put very little weight on \t\t\twhat is priced in or not priced into the market&We make our decision \t\t\ton the way we think is the best way to achieve our mandate.” US \t\t\tequities closed flat while Treasury yields picked up, likely due to \t\t\tmoderating expectations for further QE. The Conference Board \t\t\tconsumer confidence index rose more than expected to 50.2 though \t\t\tthere was some deterioration in the current assessment of the labor \t\t\tmarket. The S&P\/Case Shiller home price index fell 0.3% m\/m in \t\t\tAugust as prices have turned from rising in Q2 to falling in Q3 \t\t\tfollowing the expiration of homebuyer tax credits. We maintain our \t\t\tview that the dollar could benefit from too much QE being priced in \t\t\tahead of Nov 3. Durable goods and new home sales are due.
\nEUR<\/span><\/em><\/strong><\/p>\n

The euro was weaker on the broader dollar rally, despite claims by \t\t\tECB Governing Council Member Quaden that the euro’s current value is \t\t\tnot out of line with economic fundamentals. ECB Governing Council \t\t\tMember Weber said that Germany’s recovery is not yet fully \t\t\tself-sustaining.
\nThe Irish government announced a target of EUR15 bn in budget \t\t\tsavings over four years, almost double the figure announced in the \t\t\tDecember 2009 Stability Programme update but in line with a recent \t\t\testimate by a government-sponsored think-tank. Details should be in \t\t\tthe 4-year fiscal plan, which is scheduled for mid-November.
\n GBP<\/span><\/em><\/strong><\/p>\n

MPC Member Posen has reaffirmed his dovish stance, saying that \t\t\tovershooting the inflation target by a little over a percentage \t\t\tpoint does not mean inflation is high, and that looking at \t\t\tshort-term data can miss the point.
\nUK preliminary Q3 GDP was reported +2.8% y\/y, vs consensus for +2.4% \t\t\tand the Q2 reading of +1.7%. The improvement was largely driven by \t\t\tconstruction and the y\/y figure was the highest since Q3 2007. The \t\t\tservice sector’s contribution to growth remained limited. The better \t\t\tGDP and S&P’s decision to change the UK ratings outlook to stable \t\t\tfrom negative and affirm the AAA rating helped sterling gain versus \t\t\tthe euro while cable came back down on the back of the broader \t\t\tdollar move.
\nAlthough the latest data decreases QE expectations, we stay cautious \t\t\ton sterling as recently announced spending cuts will likely weigh on \t\t\tdomestic growth.
\n AUD<\/span><\/em><\/strong><\/p>\n

The AUD fell heavily after Q3 CPI missed expectations. The headline \t\t\treading came in just short at +0.7% q\/q (cons. +0.8%, prev. +0.6%). \t\t\tThe core reading also missed, rising only +0.6% q\/q (cons. +0.7%, \t\t\tprev. +0.5%). Consequently, our Australia economics team no longer \t\t\texpect the RBA will raise the cash rate next week. Instead, they now \t\t\tthink the next 25bp hike will come in Feb. 2011.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong>
\nUSDCHF 1.0329 next resistance.
\nEURUSD BULLISH Look for a break above 1.4159 for resumption of the \t\t\tbull trend. Support at 1.3637\/1.3559 zone
\nUSDJPY BEARISH While resistance at 82.52 holds, expect decline \t\t\ttowards 79.75 with scope for 77.91 next.
\nGBPUSD BULLISH Recovery has scope for 1.6107. Support holds at \t\t\t1.5606
\nUSDCHF BEARISH Rise through 0.9918 breakout low exposes 1.0329. \t\t\tSupport holds at 0.9463 ahead of 0.9225.
\nAUDUSD BULLISH Move above 1.0004 would expose 1.0166. Support \t\t\tdefined at 0.9662 ahead of 0.9542 reaction low
\nUSDCAD BEARISH As long as 1.0380 continues to cap the upside, expect \t\t\tdecline towards 0.9981 and 0.9820 next.
\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 Sudden decline through 0.8773 exposes 0.8689 and \t\t\t0.8636 next. Resistance at 0.8885 yesterday’s high
\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><\/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":"

The dollar continued to find support during the Asia session after a slightly weaker than expected CPI report from Australia, and a newspaper article which said the FOMC would likely ease in “measured” fashion. EURUSD traded 1.3802-1.3878, USDJPY 81.32-81.76. Although the scope of any further Fed easing remains a significant unknown, consecutive days of decent US data have probably encouraged investors to scale back some short dollar positions.<\/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-14540","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14540","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=14540"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14540\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}