{"id":16031,"date":"2010-11-29T08:25:26","date_gmt":"2010-11-29T13:25:26","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16031"},"modified":"2010-11-29T08:25:26","modified_gmt":"2010-11-29T13:25:26","slug":"forex-daily-market-commentary-164","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/11\/29\/forex-daily-market-commentary-164\/","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

During the Asia session, risk appetite initially benefitted from the \t\t\tnews that Eurozone finance ministers had approved a ?85 bn financial \t\t\trescue package for Ireland. However, the dollar quickly re-asserted \t\t\tits authority, and the euro gave back all its gains. EURUSD traded \t\t\t1.3182-1.3354 and USDJPY 83.83-84.20. The reaction of Eurozone \t\t\tsovereign bond markets when they open today will likely be a key \t\t\tdeterminant of short term euro performance, and the spread of Irish \t\t\tsovereign yields over bunds will clearly be in focus. However, our \t\t\tEuropean rates strategists doubt that any spread tightening is \t\t\tjustified on the back of the rescue package alone. For our part we \t\t\tnote that the Eurozone sovereign debt crisis is far from resolved \t\t\tand we consequently remain bearish on the euro’s medium term \t\t\tprospects. Due to the Thanksgiving holiday, the weekly CFTC IMM \t\t\tpositioning data which is normally released on a Friday, is \t\t\tscheduled to be released instead at 20:30GMT later today.
\nEUR<\/span><\/em><\/strong><\/p>\n

Eurozone finance ministers approved a \u20ac85 bn financial rescue \t\t\tpackage for Ireland, although \u20ac17.5bn of this will come from \t\t\tIreland’s sovereign wealth fund and other domestic cash resources. \t\t\tThe remaining cash is to be sourced from the EFSM (\u20ac22.5 bn), the \t\t\tIMF (\u20ac22.5 bn), and the EFSF and bilateral loans (\u20ac22.5 bn).
\nThe cash is to be put to several uses: \u20ac10 bn has been earmarked for \t\t\tan immediate recapitalization of the banks, with a further \u20ac25 bn \t\t\tavailable as a contingency. The remaining \u20ac50bn is to be used to \t\t\tmeet the funding needs of the State. The Irish Government estimates \t\t\tthat the effective interest rate could be “of the order of 5.8%”.
\nIreland will discontinue its participation in the Greece loan \t\t\tfacility, and has been given until 2015 to reduce the budget deficit \t\t\tto 3%. This represents a one-year extension to the original \t\t\ttimetable. Repayments on the IMF portion of any loans drawn down are \t\t\tnot due to start for 4 and a half years, and are scheduled to end \t\t\tafter 10 years.
\nECB Governing Council Member Noyer said that the current crisis is \t\t\tnot a euro crisis; rather it is a sovereign crisis. Last week’s \t\t\tby-election in Ireland was won by a candidate from one of the \t\t\tsmaller opposition parties, effectively reducing the government’s \t\t\tmajority to 2 seats. The crucial Budget 2011 parliamentary vote is \t\t\tscheduled for Dec. 7.
\n JPY<\/span><\/em><\/strong><\/p>\n

BoJ Governor Shirakawa observed that the yen had fallen somewhat \t\t\tsince the Fed decided to launch another round of quantitative \t\t\teasing, although he remains on guard for how the economy could be \t\t\taffected by FX moves. He nevertheless expects the economy to resume \t\t\tits export-led recovery throughout 2011.
\n AUD<\/span><\/em><\/strong><\/p>\n

Australian inventory data was much weaker than expected in Q3, \t\t\tfalling by -0.8% (cons. +0.4%, prev. -0.1%). Our Australian \t\t\teconomics team note this implies a 0.3% q\/q detraction from the Q3 \t\t\tGDP reading which is due for release on Wednesday. Consequently, our \t\t\teconomists revised down their Q3 GDP forecast to +0.3% q\/q, putting \t\t\tthem significantly below the consensus of +0.5% q\/q. RBA Governor \t\t\tStevens is scheduled to speak at 0730GMT. The talk is entitled “The \t\t\tChallenge of Prosperity”.
\n
\nTECHNICAL OUTLOOK<\/span><\/strong>
\nEURCHF 1.3072 support
\nEURUSD BEARISH Push below 1.3235 favours another bearish run towards \t\t\t1.2988. Resistance at 1.3421
\nUSDJPY BULLISH Recovery through 83.99 exposes 85.40 reaction high \t\t\tahead of 85.93. Initial support at 83.57
\nGBPUSD BEARISH With the break of 1.5650, bear trend remains intact. \t\t\tNext support at 1.5297. Near-term resistance at 1.5773
\nUSDCHF BULLISH Rise above 0.9998 exposes 1.0183. Near-term support \t\t\tat 0.9849
\nAUDUSD BEARISH Focus is on 0.9542 reaction low; a break here would \t\t\texpose 0.9477 Fibonacci support. Resistance at 0.9818
\nUSDCAD BULLISH Sustained break of 1.0264 and 1.0374 required for \t\t\tconfirmation of bull trend. Support holds at 1.0076
\nEURCHF BEARISH Push below 1.3229 exposes 1.3072. Near-term \t\t\tresistance at 1.3401 intraday high.
\nEURGBP BEARISH Break of 0.8421 and 0.8390 would expose 0.8311. \t\t\tResistance at 0.8564
\nEURJPY BEARISH Break of 109.35 would expose 107.73 ahead of 105.44. \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":"

During the Asia session, risk appetite initially benefitted from the news that Eurozone finance ministers had approved a ?85 bn financial rescue package for Ireland. However, the dollar quickly re-asserted its authority, and the euro gave back all its gains.<\/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-16031","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16031","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=16031"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16031\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16031"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16031"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}