{"id":14791,"date":"2010-11-02T07:55:43","date_gmt":"2010-11-02T11:55:43","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14791"},"modified":"2010-11-02T07:55:43","modified_gmt":"2010-11-02T11:55:43","slug":"forex-daily-market-commentary-145","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/11\/02\/forex-daily-market-commentary-145\/","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 weakened slightly during the Asia session, thanks largely \t\t\tto a surprise policy rate hike from the RBA. EURUSD traded \t\t\t1.3874-1.3937, USDJPY 80.47-80.76. AUDUSD reached 0.9995, and looks \t\t\tpoised for a second run to parity. However, Asian equities failed to \t\t\tmake significant headway after US equities closed flat, suggesting \t\t\tinvestors are largely unwilling to put on fresh risk-seeking \t\t\tpositions ahead of this week’s events. Even though investors are \t\t\tmostly focused on the FOMC and labour data later in the week, US \t\t\tmanufacturing data lent some support to our economists’ forecast \t\t\tthat real growth should pick up to +2.5% in Q4 vs. +2% in Q3, and \t\t\tthat the FOMC announces only “QE2-lite” on Wednesday. The \t\t\tmanufacturing ISM index jumped above expectations to 56.9 in October \t\t\tfrom 54.4 in September. Meanwhile, personal income, spending and \t\t\tprice data for September were largely as expected. Of note, private \t\t\twages and salaries managed to increase again in September which is a \t\t\tcontributing factor to stronger growth. The US mid-term elections \t\t\tare due today and press reports suggest the Republicans will make \t\t\tstrong gains in both the House of Representatives and the Senate, \t\t\twhich could be dollar-supportive in the near term should investors \t\t\texpect less fiscal spending as a result.<\/p>\n


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

For the third week in a row, no bond purchases settled last week \t\t\tunder the ECB’s sovereign bond buying program. However, sovereign \t\t\tyields for peripheral issuers are still widening, and Irish 10y \t\t\tyields breached 7% again yesterday, suggesting the ECB may need to \t\t\treactivate the program in the near future.<\/p>\n

Recent sovereign risk concerns have been prompted largely by worries \t\t\tover budget negotiations in Portugal and Ireland. Friday’s decision \t\t\tby the EU Council to force bondholders to share the costs of future \t\t\tsovereign bailouts may have also been a contributing factor.<\/p>\n

Final Eurozone and German PMI Manufacturing for October are expected \t\t\tto remain largely unchanged.<\/p>\n


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

Economics Minister Kaieda said the government should intervene if FX \t\t\tmarket movements are abrupt, and he warned that the government may \t\t\tnot be able to implement part of its stimulus plan until next year \t\t\tas it may be hard to pass the supplementary budget by December.<\/p>\n

Kaeida went on to say that he is closely watching the outcome of the \t\t\tFOMC meeting, but that BoJ will make its own decision on monetary \t\t\tpolicy.<\/p>\n

Finance Minister Noda said that FX moves in recent days were \t\t\tone-sided and that he stands ready to take decisive action if \t\t\tneeded.<\/p>\n

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

The PMI for the manufacturing sector rose to 54.9 in October, while \t\t\ta small decrease to 53.0 had been expected. The PMI for the service \t\t\tsector will be published on Wednesday. Contrary to the majority we \t\t\texpect to see a slight rise to 53.0. This would be further \t\t\tconfirmation that the British economy is recovering. That means that \t\t\tat the central bank meeting on Thursday the Bank of England will not \t\t\tdecide on any further measure of monetary policy easing. But it is \t\t\tstill too early to sound the all clear. Even if the most recent \t\t\tpublications suggest that an extension of the expansionary monetary \t\t\tpolicy is unlikely short term we will have to wait and see what \t\t\teffects the government\u2019s budget consolidation measures will have. \t\t\tShould the UK publications disappoint over the coming weeks concerns \t\t\tabout additional measures of quantitative easing on the part of the \t\t\tBoE will easily re-emerge. Moreover the BoE\u2019s rhetoric is unlikely \t\t\tto change. Recently its members had increasingly referred to \t\t\tuncertainties regarding the economic outlook. \t\t\tAs a result Sterling remains vulnerable to set-backs.<\/p>\n


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


\n<\/span><\/strong> EURUSD BULLISH Look for a break above 1.4159, which would trigger \t\t\tanother bullish run towards 1.4373. Support holds at 1.3698<\/p>\n

USDJPY BEARISH Outlook is bearish; next big support below 79.75 lies \t\t\tat 77.91. Resistance at 81.41, Monday’s high.<\/p>\n

GBPUSD BULLISH Clearance of 1.6107 would expose 1.6276 and 1.6458 \t\t\tnext. Support comes in at 1.5878 ahead of 1.5606<\/p>\n

USDCHF BEARISH Bounce-off from 0.9463 pushed through resistance at \t\t\t0.9929 thus exposing 1.0183. Near-term support at 0.9703.<\/p>\n

AUDUSD BULLISH Positive momentum pressures 1.0004; a break here \t\t\twould expose 1.0222 measured target. Support at 0.9866 intraday low \t\t\tahead of 0.9542 reaction low.<\/p>\n

USDCAD BEARISH Clearance of 1.0154 puts odds in favor of extension \t\t\tof losses towards 0.9981. Upside capped at 1.0380<\/p>\n

EURCHF BULLISH Targets 1.3924 with scope for 1.4041 next. Near-term \t\t\tsupport at 1.3540<\/p>\n

EURGBP BULLISH While support at 0.8636 holds, view pullback as \t\t\tcorrection. Resistance at 0.8772<\/p>\n

EURJPY BULLISH Only a break below 110.66 would hurt the positive \t\t\ttone. Resistance at 113.78 ahead of 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 weakened slightly during the Asia session, thanks largely to a surprise policy rate hike from the RBA. EURUSD traded 1.3874-1.3937, USDJPY 80.47-80.76. AUDUSD reached 0.9995, and looks poised for a second run to parity.<\/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-14791","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14791","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=14791"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14791\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}