{"id":14652,"date":"2010-10-29T08:39:21","date_gmt":"2010-10-29T12:39:21","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14652"},"modified":"2010-10-29T08:39:21","modified_gmt":"2010-10-29T12:39:21","slug":"forex-daily-market-commentary-143","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/10\/29\/forex-daily-market-commentary-143\/","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

In the run-up \t\t\tto the FOMC meeting next week the jungle drums are beating. Why does \t\t\tthe NY Fed poll market participants on their expectations regarding \t\t\tthe QE volume? The USD positive explanation is: It is uncertain how \t\t\tlarge the volume should be. As a fine balance has to be struck \t\t\tbetween a sufficiently large effect on the bond markets (to ensure \t\t\tthat yields fall or remain low) and inflation effects that are \t\t\tmanageable (so that yields do not rise). The USD negative \t\t\t\u201cconspiracy\u201d theory is: The Fed wants to maximise the effect with a \t\t\tsurprisingly large QE 2.0 volume. For that to be possible it will \t\t\thave to know what sort of volume would surprise. We do not believe \t\t\tin conspiracy theories.
\nToday\u2019s US GDP data is unlikely to have much of an effect \u2013 unless \t\t\tit surprises notably. Regardless of whether the GDP will be slightly \t\t\thigher or lower: QE is a fait accompli.<\/p>\n


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

European Council President Van Rompuy said EU leaders agreed to \t\t\tchanges in the EU treaty focused on creating a mechanism for crisis \t\t\tresolution. However, he also said that the “no-bailout” principle \t\t\twill be kept. ECB Governing Council Weber said a mechanism needs to \t\t\tbe developed for any acute Eurozone crisis, and that the problem of \t\t\tinternal Eurozone imbalances must be dealt with.<\/p>\n

Portuguese Prime Minister Socrates said the government wants to \t\t\treach an agreement on the 2011 budget proposal to ensure that it is \t\t\tpassed on November 2. Eurozone spreads had widened when discussions \t\t\tbetween the government and the main opposition ended but reports \t\t\tthat the ECB bought Irish bonds in the market helped curb the spread \t\t\twidening. That said, investors are still pricing in a good deal of \t\t\tuncertainty in peripheral economies, which is likely restraining \t\t\tsignificant euro upside.<\/p>\n

SNB officials Danthine and Hildebrand were on the wires but did not \t\t\toffer much new regarding monetary policy. Danthine was largely \t\t\tnon-committal on the Swiss outlook, which indicated the SNB’s \t\t\tcomfort with current policy. Hildebrand spoke on “Monetary Policy \t\t\tand the Real Estate Market”. His comments indicated he considers \t\t\tinflation to be a non-issue and sees some risks in the Swiss housing \t\t\tmarket. All in all there were no signs of any imminent monetary \t\t\ttightening.<\/p>\n


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

Manufacturing PMI in October was 47.2, down from 49.5 in September. \t\t\tSimilarly industrial production in September was -1.9% m\/m (cons. \t\t\t-0.6%, prev. -0.3%). The slowdown in manufacturing activity is \t\t\tmainly due to slowing export growth on the back of a stronger yen. \t\t\tCore inflation came in at -1.1% y\/y (cons. -1.0%, prev. -1.0%), \t\t\tfalling for the 19th consecutive month. Labour data was also \t\t\treleased, with the unemployment rate slipping to 5.0% versus \t\t\tconsensus for a flat 5.1% reading.<\/p>\n

USDJPY remained capped for much of the session as investors \t\t\trecalibrated Fed expectations, though the BoJ’s decision to bring \t\t\tforward the Nov 15-16 meeting to Nov 4-5, suggesting scope for more \t\t\timmediate action based on what the Fed does, could lend some support \t\t\tto USDJPY.<\/p>\n


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


\n<\/span><\/strong> EURUSD BULLISH While support holds at 1.3637, expect recovery \t\t\ttowards 1.4159 and 1.4373 next<\/p>\n

USDJPY BEARISH Outlook is bearish with initial support defined at \t\t\t80.41 ahead of 79.75 and 77.91. Resistance at 81.99<\/p>\n

GBPUSD BULLISH Upside potential has scope for 1.6107. Support holds \t\t\tat 1.5606<\/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 but holds well above 0.9542 \t\t\treaction low. 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. Resistance at 0.8885<\/p>\n

EURJPY BULLISH Remains constructive above 111.56, keeping our focus \t\t\ton the upside. Upside capped at 115.68 ahead of 116.68<\/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":"

In the run-up to the FOMC meeting next week the jungle drums are beating. Why does the NY Fed poll market participants on their expectations regarding the QE volume? The USD positive explanation is: It is uncertain how large the volume should be. As a fine balance has to be struck between a sufficiently large effect on the bond markets (to ensure<\/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-14652","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14652","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=14652"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14652\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}