{"id":16494,"date":"2010-12-08T08:36:34","date_gmt":"2010-12-08T13:36:34","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16494"},"modified":"2010-12-08T08:36:34","modified_gmt":"2010-12-08T13:36:34","slug":"forex-daily-market-commentary-171","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/12\/08\/forex-daily-market-commentary-171\/","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 strengthened further during the Asia session, supported \t\t\tby US Treasury yields that continue to climb sharply. The trigger \t\t\tfor the move was the news that US President Obama and the Republican \t\t\tleadership have reached a tentative agreement on a new tax deal. \t\t\tEURUSD traded 1.3206-1.3316, USDJPY 83.24-84.02. Under the plan, the \t\t\tBush-era tax cuts are to be extended for another two years. \t\t\tMiddle-income earners are also to enjoy tax cuts, and Federal \t\t\tunemployment benefits are to be extended for a further 13 months. \t\t\tNewswires cited a Moody’s analyst saying that although they do not \t\t\tsee a change in the US ratings outlook in the next year or two, \t\t\tthere are long-term concerns on the outlook that the tax proposal \t\t\tdoes not address. Fitch, on the other hand, said the tax moves show \t\t\tthe “broad political agreement needed for fiscal consolidation\u201d.
\nOur team notes that, if passed in its current form, this tax \t\t\tproposal could add as much as 0.5% to our already above-consensus \t\t\tgrowth outlook of 2.7% (calendar average) for 2011. It would also \t\t\tlikely boost their budget deficit estimates for both fiscal years \t\t\t2011 and 2012, by $230 bn and $145 bn, respectively.
\n EUR<\/span><\/em><\/strong><\/p>\n

Ireland’s Budget 2011 was passed by parliamentary vote. In line with \t\t\texpectations, a ?6 bn fiscal adjustment is targeted for next year. \t\t\tThis of course is just another step in what is likely to be a \t\t\tlengthy process of fiscal consolidation extending out to 2014 or \t\t\t2015.
\nGerman Finance Minister Schaeuble remains ready to defend the euro \t\t\tand is confident Portugal will do what is necessary. He also said a \t\t\tEurobond is not possible without fundamental EU changes. An key \t\t\tadvisor to the German government said Eurobonds would be \t\t\tinappropriate. Instead he favours a joint European fiscal policy.
\nEU Commissioner Rehn said new, more rigorous bank stress tests will \t\t\tstart in February. Methodology and scope are under discussion and a \t\t\tliquidity assessment could be included.
\n JPY<\/span><\/em><\/strong><\/p>\n

Japan’s Economy Minister Kaieda said it would be desirable for the \t\t\tBoJ to remove its self-imposed limit on the stock of JGBs the Bank \t\t\tcan hold. Sticking to the government’s existing line, he said FX \t\t\tmarkets are basically decided by markets, but that the government \t\t\tneeds to take steps if the yen rises excessively.
\n GBP<\/span><\/em><\/strong><\/p>\n

Manufacturing production beat consensus at 0.6% m\/m versus 0.3% in \t\t\tOctober, which supported sterling despite a below expectations \t\t\tindustrial production print. The November BRC retail sales survey \t\t\twas also less positive but the data should have minimal impact on \t\t\tthe upcoming BoE meeting, where we expect no change in policy.
\n CAD<\/span><\/em><\/strong><\/p>\n

The BoC kept the policy rate unchanged as expected. The tone of the \t\t\tstatement was dovish, unsurprising given disappointing Q3 GDP, as H2 \t\t\t2010 activity appears weaker versus the October Monetary Policy \t\t\tReport projections. Officials said weak net exports continue to drag \t\t\ton growth and the combination of disappointing productivity \t\t\tperformance and CAD strength could keep downward pressure on net \t\t\texports. The inflation picture was unchanged and the statement again \t\t\tnoted any policy stimulus reduction, “would need to be carefully \t\t\tconsidered\u201d.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDJPY targets 84.41.
\nEURUSD BEARISH Recovery pressured 1.3448; but overall focus is on \t\t\tdownside with initial support defined at 1.3193 ahead of 1.2969.
\nUSDJPY BULLISH Following the sudden recovery yesterday, the pair now \t\t\ttargets 84.41. Support at 83.46 intraday low.
\nGBPUSD BEARISH Expect downside momentum to target 1.5656 with scope \t\t\tfor 1.5485 next. Resistance at 1.5823.
\nUSDCHF NEUTRAL Initial support at 0.9726. Resistance at 0.9951.
\nAUDUSD NEUTRAL 0.9965 and 0.9739 mark the key near-term directional \t\t\ttriggers.
\nUSDCAD BEARISH Break through the 0.9978\/31 support zone would open \t\t\tup the way towards 0.9820. Resistance at 1.0190.
\nEURCHF BEARISH Remains heavy below 1.3229 breakout low keeping our \t\t\tfocus on downside; expect losses to target 1.2933 and 1.2766 next.
\nEURGBP BEARISH Momentum is negative; eyes 0.8390 ahead of 0.8335. \t\t\tUpside capped at 0.8528.
\nEURJPY BEARISH Look for a break below 108.35 and 107.73 to trigger \t\t\tanother bearish run towards 105.44 key low. Near-term resistance at \t\t\t111.98.<\/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 strengthened further during the Asia session, supported by US Treasury yields that continue to climb sharply. The trigger for the move was the news that US President Obama and the Republican leadership have reached a tentative agreement on a new tax deal.<\/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-16494","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16494","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=16494"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16494\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}