{"id":16992,"date":"2010-12-17T08:45:16","date_gmt":"2010-12-17T13:45:16","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16992"},"modified":"2010-12-17T08:45:16","modified_gmt":"2010-12-17T13:45:16","slug":"forex-daily-market-commentary-178","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/12\/17\/forex-daily-market-commentary-178\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex<\/a> Research<\/strong><\/p>\n

Fundamental Outlook at \t\t\t0800 GMT (EDT + 0400)<\/strong><\/p>\n

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

The rating \t\t\tagency Moody\u2019s lowered its rating for Ireland from Aa2 to Baa1. It \t\t\tshould have been obvious to everyone that Aa2 was no longer \t\t\tsustainable, but a step of this magnitude is nonetheless surprising. \t\t\tThe timid attempts of a EUR-USD uptrend were thus stopped in their \t\t\ttracks this morning. We do not expect to see a further attempt of an \t\t\tupwards correction prior to the publication of the Ifo index. Even a \t\t\tmoderately positive surprise for the Ifo index is unlikely to create \t\t\tany new momentum \u2013 after all it is not concerns about the German \t\t\teconomy that are putting pressure on the euro, but other factors.<\/p>\n

The summit of the EU heads of government and state in Brussels did \t\t\tnot bring any surprises yesterday. As expected the main elements of \t\t\tthe permanent crisis mechanism, which had been drawn up by the \t\t\tFinance Ministers two weeks ago, were confirmed. The EU treaty was \t\t\tadjusted with the help of a \u201csmall amendment\u201d so that it endorses \t\t\tthe stability mechanism. This approach towards a change of the \t\t\ttreaty entails only limited implementation risks. As expected the \t\t\tPresident of the Council Herman van Rompuy\u2019s press release does not \t\t\tcontain any further details on the extension of the crisis mechanism \t\t\t(EMU bond or extension of the EFSF guarantees). Should the risk \t\t\tpremiums for bonds of the peripheral countries rise again following \t\t\tthe period of low liquidity over the holidays attention would no \t\t\tdoubt return to these possibilities.<\/p>\n

For EUR-USD the result of the Brussels summit means above all that \t\t\tevent risk was reduced. Fears of the summit which were probably \t\t\tresponsible for a good part of the slide on Wednesday turned out to \t\t\tbe unfounded. So there is no need for any major reallocations during \t\t\tthe period of low liquidity over the holidays. Market participants \t\t\tcan hope for a quiet Christmas period.<\/p>\n

Medium term the New Year might provide new momentum for EUR-USD. \t\t\tDespite the new round of the EMU debt crisis speculative market \t\t\tparticipants are only moderately exposed in EUR shorts in our view. \t\t\tTonight will bring the publication of the latest CFTC statistics on \t\t\tthe positioning of speculative IMM traders, which is unlikely to \t\t\tchange this fact. This reservation is probably partially due to the \t\t\tnearing year-end. It will then be decisive whether markets have \t\t\talready got used to corner stones of the crisis mechanism. If that \t\t\twasn\u2019t to be the case EUR-USD might come under pressure.
\n
\nEUR<\/span><\/em><\/strong><\/p>\n

European Union President Van Rompuy said \t\t\tthat EU leaders have agreed to conduct new stress tests in the \t\t\tbanking sector and that they stand ready to do whatever is needed to \t\t\tensure the stability of the Eurozone. European Commission President \t\t\tBarroso said the euro is very stable despite current difficulties.<\/p>\n

Ahead today, the Ifo business climate survey \t\t\tfor December will be released. Investors’ expectations are high \t\t\tgiven the latest improvement in manufacturing activity as suggested \t\t\tby yesterday’s PMI release. Nevertheless, our economists expect the \t\t\tsurvey to fall slightly short of expectations.<\/p>\n


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

The Bank of England’s half-yearly Financial \t\t\tStability Report said the domestic financial system has \t\t\tstrengthened, but threats have risen since June. It noted that banks \t\t\tare more worried about an economic downturn and property prices than \t\t\tin May.<\/p>\n

Yesterday, retail sales were stronger than \t\t\texpected at 1.8% y\/y, though the m\/m print was in line with \t\t\texpectations. Retail sales are likely to strengthen in December and \t\t\tthen plunge in Jan because of the VAT hike in Jan. However, the \t\t\tBoE’s MPC is likely to be unmoved by this data.<\/p>\n

The BoE released its inflation expectations \t\t\tsurvey and year-ahead expectations is now at 3.9% vs. 3.4% \t\t\tpreviously.
\n<\/p>\n

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

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


\n<\/span><\/strong> EURUSD BEARISH Focus is on 1.3181\/65; move below the support zone \t\t\twould expose 1.3060. Resistance at 1.3382<\/p>\n

USDJPY BULLISH Currently holds resistance at 84.51 ahead of 85.40. \t\t\tSupport at 83.60<\/p>\n

GBPUSD BEARISH Abrupt decline found support at 1.5531 ahead of \t\t\t1.5485. Initial resistance at 1.5676<\/p>\n

USDCHF BEARISH Momentum is negative; expect losses to target 0.9562 \t\t\tand 0.9463 key low.<\/p>\n

AUDUSD BULLISH Decline through 0.9841\/33 exposes 0.9725 and 0.9625. \t\t\tResistance at 1.0029<\/p>\n

USDCAD BEARISH Pressure building on 0.9978\/31 support zone; initial \t\t\tresistance defined at 1.0141<\/p>\n

EURCHF BEARISH Bear trend extends; next support at 1.2676 ahead of \t\t\t1.2649. Resistance at 1.2871<\/p>\n

EURGBP NEUTRAL Move above 0.8598 would trigger bull trend. Support \t\t\tat 0.8451<\/p>\n

EURJPY NEUTRAL 113.67 and 110.49 mark the near-term directional \t\t\ttriggers<\/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 rating agency Moody\u2019s lowered its rating for Ireland from Aa2 to Baa1. It should have been obvious to everyone that Aa2 was no longer sustainable, but a step of this magnitude is nonetheless surprising. The timid attempts of a EUR-USD uptrend<\/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-16992","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16992","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=16992"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16992\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}