{"id":14563,"date":"2010-10-28T10:18:21","date_gmt":"2010-10-28T14:18:21","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14563"},"modified":"2010-10-28T10:18:21","modified_gmt":"2010-10-28T14:18:21","slug":"forex-daily-market-commentary-142","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/28\/forex-daily-market-commentary-142\/","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 steady overnight amid a general lack of fresh news. \t\t\tThe Bank of Japan detailed its easing measures but intervention \t\t\tseems off the cards around these levels as most partiers are \t\t\tprobably waiting for the Fed’s upcoming steps before deciding on \t\t\tfurther action. UK housing data was also softer than expected. \t\t\tMeanwhile, investors continue to recalibrate expectations for the \t\t\tFed’s next move following a Wall Street Journal article and signs of \t\t\tpressure in the Eurozone kept the dollar relatively well-supported. \t\t\tWires also reported that the Fed is asking for projections of \t\t\tupcoming purchases to evaluate their upcoming steps. Equities closed \t\t\tmodestly flat and Treasury yields remained elevated as some \t\t\tinflation expectations continue to creep in. The WSJ article \t\t\tsuggests a relatively small QE program will be unveiled at the \t\t\tupcoming FOMC meeting: “a program of U.S. Treasury bond purchases \t\t\tworth a few hundred billion dollars over several months”. This is a \t\t\tcontrast to the shock and awe (large, long-term) approach that some \t\t\tin the market have expected. And again, with US data not terribly \t\t\tdisappointing, investors likely took note and adjusted positioning. \t\t\tAmong the data releases, durable goods orders rose more than \t\t\tconsensus estimates at 3.3% in September though underlying elements \t\t\tof the report were a good deal weaker. Orders excluding \t\t\ttransportation fell 0.6% versus expectations for a gain. Meanwhile, \t\t\tnew home sales rose 6.6% in Sept. That is still a very slow sales \t\t\tpace, but the rise is consistent with a range of other data that \t\t\tsuggest home sales have bottomed. Jobless claims is the only data \t\t\tdue in the US. Ahead today, jobless claims data will be out in the \t\t\tUS and Germany unemployment is expected to show a further decline. \t\t\t \t\t\tOvernight EURUSD traded 1.3764-1.3829 and \t\t\tUSDJPY 81.51-81.79.<\/p>\n


\nEUR<\/span><\/em><\/strong><\/p>\n

Eurozone worries persist despite the focus on potential QE2 in the \t\t\tUS. The Portugese government and the opposition Social Democrats \t\t\tcould not reach a consensus for a 2011 budget proposal, which is \t\t\texpected to contain cuts, the amount of which have not been seen \t\t\tsince the 1970s. Parliament will discuss the 2011 budget November 2 \t\t\twith votes scheduled for the following day. The Social Democrats \t\t\tneed to either vote for the budget or abstain for Prime Minister \t\t\tSocrates to get the budget through. Irish Finance Minister Lenihan \t\t\tsaid their fiscal position remains serious and that Ireland cannot \t\t\t“unilaterally devalue.” And the ECB’s latest liquidity operation \t\t\tshowed larger-than-expected demand from banks for cheap funding.<\/p>\n

Meanwhile, the Eurogroup’s Juncker said the dollar is undervalued \t\t\tagainst the euro and “Europe is the victim” of global currency \t\t\tpolicies. German Chancellor Merkel also said FX rates must reflect \t\t\tfundamentals and excess currency distortions hurt all economies.<\/p>\n

We expect EURUSD to stay capped, and remain of the view that the \t\t\tpast few weeks’ range will ultimately unravel to the downside.<\/p>\n


\nJPY<\/span><\/em><\/strong><\/p>\n

The Bank of \t\t\tJapan announced it would purchase lower-rated corporate debt to \t\t\tfurther ease conditions in the domestic economy, as a part of its \t\t\tcomprehensive package put forward last month. The BoJ also announced \t\t\tmore meetings next week to consider purchases of other assets.<\/p>\n

Purchases amounts of other assets were detailed at this meeting, but \t\t\toverall sizes were unchanged as the asset purchase program and \t\t\tcredit-loan program will remain unchanged at \u00a55tln and \u00a530tln \t\t\trespectively. Intervention remains a difficult subject but we \t\t\tbelieve USDJPY will need to make another material move to the \t\t\tdownside to force the authorities back in.
\nOn the data side, retail trade was lower than expected at -3%m\/m \t\t\t(cons. -0.5%m\/m).<\/p>\n


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


\n<\/span><\/strong> EURUSD BULLISH Move above 1.4159 required for resumption of the bull \t\t\ttrend. Support at 1.3637\/1.3559 zone<\/p>\n

GBPUSD BULLISH Recovery has scope for 1.6107. Support holds at \t\t\t1.5606<\/p>\n

USDCHF BEARISH Rise above 0.9918 breakout low exposes 1.0183. \t\t\tSupport holds at 0.9703 ahead of 0.9463<\/p>\n

AUDUSD BULLISH Break of 0.9662 support has exposed 0.9542 reaction \t\t\tlow next. Resistance at 1.0004<\/p>\n

USDCAD BEARISH As long as 1.0380 continues to cap the upside, expect \t\t\tdecline towards 1.0154 ahead of 0.9981<\/p>\n

EURCHF BULLISH Momentum is positive; expect acceleration of gains \t\t\ttowards 1.3924. Near-term support at 1.3456 ahead of 1.3265<\/p>\n

EURGBP BULLISH Pullback from 0.8942 eyes 0.8689 with scope for \t\t\t0.8636 next.<\/p>\n

EURGBP BEARISH Focus is on the downside; expect loses to target \t\t\t0.8167 with scope for 0.8068 next. Short-term resistance is defined \t\t\tat 0.8363<\/p>\n

EURJPY BEARISH Decline through 107.32 would open up the way to \t\t\t104.72. Near-term resistance is defined at 111.11 ahead if 114.74<\/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 was steady overnight amid a general lack of fresh news. The Bank of Japan detailed its easing measures but intervention seems off the cards around these levels as most partiers are probably waiting for the Fed’s upcoming steps before deciding on further action. <\/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-14563","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14563","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=14563"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14563\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}