{"id":15902,"date":"2010-11-26T09:15:03","date_gmt":"2010-11-26T14:15:03","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=15902"},"modified":"2010-11-26T09:15:03","modified_gmt":"2010-11-26T14:15:03","slug":"forex-daily-market-commentary-163","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/11\/26\/forex-daily-market-commentary-163\/","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 made strong gains during the Asia session after an \t\t\tarticle in the Financial Times Deutschland claimed that the ECB and \t\t\ta majority of Eurozone nations are urging Portugal to accept a \t\t\tbailout. Sentiment was not helped either by reports of further \t\t\tfiring on the Korean peninsula. Finally, RBA Governor Stevens \t\t\tprovided extensive policy guidance, effectively ruling out any \t\t\tfurther rate hikes in the near future. This dulled the allure of the \t\t\trisk-on trade, also causing the NZD to weaken. EURUSD traded \t\t\t1.3294-1.3376 and USDJPY 83.56-83.92. Despite the lack of US \t\t\teconomic data there remains plenty of event risk today, with \t\t\tPortugal’s budget in focus. Parliamentary approval is expected but \t\t\tthere are larger forces at work at present for the euro and the \t\t\tmarket will probably continue to trade on a risk-averse note. If \t\t\tnegotiations between Ireland, the IMF, the EU and the ECB result in \t\t\tan agreement over the weekend, this could offer the euro some \t\t\tsupport on Monday. But any relief rally is likely to be short-lived \t\t\tgiven uncertainty surrounding the Irish budget vote which is \t\t\tcurrently scheduled for Dec. 7.
\nThe common view is that by resisting currency appreciation against \t\t\tthe US dollar, Asian central banks are importing the Federal \t\t\tReserve’s interest rate policy and generating asset price inflation. \t\t\tWhile there’s clearly truth in this, the difficulty is that during \t\t\tany transition to a more orthodox policy in Asia, capital inflows \t\t\tcould actually accelerate in the first few years before current \t\t\taccount deficits of sufficient size emerged to relieve upward \t\t\tpressure on money and credit aggregates.
\nEUR<\/span><\/em><\/strong><\/p>\n

A German government spokesman noted that both it and France have \t\t\tagreed that the current Eurozone rescue mechanism should remain \t\t\tunchanged until mid-2013, but Germany authorities continue to stress \t\t\tthat private market bond holders are expected to bear losses under \t\t\tthe new framework.
\nPeripheral bond spreads remain wide but even bunds are now suffering \t\t\tas investors begin to contemplate the cost of any Eurozone bailout \t\t\tto Germany and its own sovereign condition.
\nFunding concerns remain in the Eurozone as investors have noted a \t\t\tsharp rise in usage of the ECB’s marginal lending facility, while \t\t\tthe basis swap market is pointing to renewed demand for dollars, \t\t\tdespite the presence of central bank swap lines.
\n JPY<\/span><\/em><\/strong><\/p>\n

Headline CPI turned positive in October for the first time in almost \t\t\ttwo years, reaching +0.2% y\/y, in line with consensus. However, our \t\t\tJapan economist notes that this was largely due to a hike in tobacco \t\t\ttax. The core CPI reading remains in negative territory at -0.6% y\/y \t\t\tfor the twentieth consecutive month.
\n GBP<\/span><\/em><\/strong><\/p>\n

MPC members King, Tucker, Dale, Posen and Sentance appeared before \t\t\tUK lawmakers today and the Governor affirmed his view that inflation \t\t\trisks are balanced, but the BoE would be ready to act if necessary.
\n AUD<\/span><\/em><\/strong><\/p>\n

RBA Governor Stevens commented extensively on the outlook for \t\t\tmonetary policy and clearly signaled the RBA is in no hurry to hike \t\t\tthe cash rate. He said it is reasonable for the market to assume \t\t\tthat the next hike will likely come around the middle of next year. \t\t\tStevens maintained a tightening bias though, noting that the \t\t\t“medium-term risks on inflation lie in the direction of it being too \t\t\thigh, rather than too low”.
\n CHF<\/span><\/em><\/strong><\/p>\n

The KoF leading indicator is due in Switzerland and we expect a \t\t\tdecline to 2.12 from last month’s 2.17. Nonetheless the Swiss \t\t\teconomy is expected to continue outperforming the Eurozone and we \t\t\tstill expect EURCHF to trend lower in the current environment.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong>
\nAUDUSD targets 0.9652 support.
\nEURUSD BEARISH Momentum is negative; break of 1.3235 would expose \t\t\t1.2988. Resistance at 1.3634.
\nUSDJPY BULLISH Climb above 83.99 would expose 85.93. Initial support \t\t\tat 82.40 ahead of 81.66 reaction low.
\nGBPUSD BEARISH Violation of 1.5650 would open up the way towards \t\t\t1.5297. Near-term resistance at 1.5838.
\nUSDCHF BULLISH Rise above 0.9998 exposes 1.0183. Near-term support \t\t\tat 0.9849.
\nAUDUSD BEARISH The pair targets 0.9652 with scope for 0.9542 next. \t\t\tResistance at 0.9954.
\nUSDCAD BEARISH Holds below 1.0374 keeping our focus on the downside. \t\t\tInitial support defined at 1.0076 ahead of 0.9978.
\nEURCHF BEARISH Pullback from 1.3674 eyes 1.3229 support, break of \t\t\tthe level would expose 1.3072. Near-term resistance at 1.3488.
\nEURGBP BEARISH Push below 0.8449 exposes 0.8390 next. Initial \t\t\tresistance at 0.8543.
\nEURJPY BEARISH Break of 109.35 would expose 107.73 ahead of 105.44. \t\t\t \t\t\t \t\t\tNear-term resistance at 113.67.<\/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 made strong gains during the Asia session after an article in the Financial Times Deutschland claimed that the ECB and a majority of Eurozone nations are urging Portugal to accept a bailout. Sentiment was not helped either by reports of further firing on the Korean peninsula.<\/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-15902","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/15902","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=15902"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/15902\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=15902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=15902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=15902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}