{"id":14974,"date":"2010-11-04T08:48:15","date_gmt":"2010-11-04T12:48:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=14974"},"modified":"2010-11-04T08:48:15","modified_gmt":"2010-11-04T12:48:15","slug":"forex-daily-market-commentary-147","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/11\/04\/forex-daily-market-commentary-147\/","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

For a long \t\t\ttime markets had been eagerly awaiting the decision and now the Fed \t\t\thas taken position. Last night it announced that the Fed will \t\t\tpurchase $600 billion of Treasuries until end of Q2\/2011. Together \t\t\twith the reinvestment of swiftly maturing assets (mainly due to \t\t\tprepayments on mortgages) the total volume of bond purchases may \t\t\treach $900 billion over that period. And the Fed even did not \t\t\tproclaim that this number is a hard ceiling. Instead, the US central \t\t\tbankers will adjust the volume of asset purchases according to newly \t\t\tavailable data.
\nEUR-USD started a roller-coaster ride after the announcement, but in \t\t\tthe end the USD came under pressure. And not without reason, even \t\t\tthough the Fed had initially announced a volume which was relatively \t\t\tclose to the (in this instance difficult to measure) market \t\t\texpectations. The Fed\u2019s announcement that the volume and speed of \t\t\tthe purchasing programme will be adjusted if necessary to reach the \t\t\ttwo targets of price stability and maximum employment might soon \t\t\tturn out to be a bottomless pit. The Fed is likely to finally banish \t\t\tany fears about deflation. But it is far from certain whether \t\t\tfurther bond purchases will help a recovery of the US economy. So \t\t\tfar Ben Bernanke has failed to provide an explanation of how further \t\t\tbond purchases are going to support the economy. Even if the Fed\u2019s \t\t\tmeasures will hold yields down, yields have been at low levels for \t\t\tquite some time so that it is questionable if the purchases will \t\t\tlead to additional investments. Also the large supply on the housing \t\t\tmarket is unlikely to be reduced by these measures. Consumer \t\t\tsentiment is therefore expected to remain subdued.
\nBut what is the Fed going to do once it becomes obvious that the \t\t\teconomy (which is not in recession but is on a growth path slightly \t\t\tbelow potential) does not gain momentum and unemployment remains \t\t\thigh? Following today\u2019s announcement the Fed would then have to open \t\t\tthe flood gates even further. The announcement gives the markets \t\t\tlittle reason to assume that the Fed would not implement this plan. \t\t\tAs a result things are likely to become increasingly uncomfortable \t\t\tfor USD and it only seems a matter of time until EUR-USD breaches \t\t\tits recent high at 1.42.<\/p>\n


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

Nobody \t\t\texpects the ECB to change key rates today or to announce further \t\t\tdetails about an exit from its unconventional monetary policy. It \t\t\tcan nonetheless not be excluded that the EUR will benefit from the \t\t\tsubsequent press conference. Compared with the Fed the ECB will once \t\t\tagain present itself as a central bank with an eye for the important \t\t\tissues long term. That is not reviving the economy short term but \t\t\tguaranteeing price level stability long term. Admittedly also the \t\t\tECB decided to buy bonds, and what is worse those of struggling \t\t\tEurozone members. But there is no doubt that the ECB will end this \t\t\tprogramme in the foreseeable future, while the Fed still has the \t\t\tfoot on the accelerator. In view of this discrepancy EUR-USD might \t\t\trise further this afternoon<\/p>\n


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

Another UK data publication surprised on the upside yesterday. \t\t\tContrary to expectations the PMI for the service sector rose \t\t\tslightly to 53.2 in October. Against the background of better \t\t\teconomic data over the past few days it is unlikely that the Bank of \t\t\tEngland will announce an extension of the asset purchases at today\u2019s \t\t\tmeeting. It will however be interesting to see whether the trend \t\t\ttowards QE among the members has increased. We will however have to \t\t\twait for the inflation report next Wednesday as well as the central \t\t\tbank\u2019s meeting minutes the following week for any indications on \t\t\tthis issue.
\n<\/p>\n

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

TECHNICAL OUTLOOK<\/span><\/strong><\/p>\n


\n<\/span><\/strong> EURUSD BULLISH Rise through 1.4159 triggers another bullish run \t\t\ttowards 1.4373. Support is at 1.392.<\/p>\n

USDJPY BEARISH Little support below 79.75 till 77.91. Resistance at \t\t\t81.99<\/p>\n

GBPUSD BULLISH Break of 1.6107 has exposed 1.6276 and 1.6458 next. \t\t\tSupport comes in at 1.5957.<\/p>\n

USDCHF NEUTRAL Breach of 0.9703 exposes 0.9463. Upside capped at \t\t\t0.9972<\/p>\n

AUDUSD BULLISH Momentum is positive; next resistance at 1.0222, \t\t\tmeasured target. Support at 0.9891 ahead of 0.9542 reaction low.<\/p>\n

USDCAD BEARISH Outlook is bearish; the pair targets 0.9981 with \t\t\tscope for 0.9820. Resistance at 1.0156.<\/p>\n

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

EURGBP NEUTRAL 0.8942 and 0.8652 mark the near-term directional \t\t\ttriggers.<\/p>\n

EURJPY BULLISH Clearance of 115.68 would expose 116.68 and 119.33 \t\t\tnext. Support comes in at 110.66<\/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":"

For a long time markets had been eagerly awaiting the decision and now the Fed has taken position. Last night it announced that the Fed will purchase $600 billion of Treasuries until end of Q2\/2011. <\/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-14974","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14974","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=14974"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/14974\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=14974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=14974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=14974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}