{"id":18091,"date":"2011-01-14T08:20:29","date_gmt":"2011-01-14T13:20:29","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=18091"},"modified":"2011-01-14T08:20:29","modified_gmt":"2011-01-14T13:20:29","slug":"forex-daily-market-commentary-196","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/01\/14\/forex-daily-market-commentary-196\/","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 lack of newsflow during the Asia session ensured the price \t\t\taction was fairly subdued. Yesterday’s powerful euro advance has \t\t\tfinally come to a halt, and the euro weakened slightly as the \t\t\tsession wore on. EURUSD traded 1.3323-1.3373, USDJPY 82.49-82.86. \t\t\tFed Chairman Bernanke, speaking at an FDIC forum on small business \t\t\tlending, said the risk of deflation has “receded considerably”. A \t\t\tdisappointing U S jobless claims print helped the dollar claw back \t\t\tsome ground against the Canadian dollar. Initial jobless claims \t\t\tjumped unexpectedly to 445k but claims data can be especially \t\t\tvolatile around this time of year, reflecting huge seasonal swings \t\t\tas well as the impact of inclement weather. So a hint of caution may \t\t\tbe needed with this latest weekly print, despite the slight pick-up \t\t\tin the key 4-week average. In other data releases, the nominal trade \t\t\tdeficit was little changed at $38.3bn, but our analysts acknowledge \t\t\tsome resulting upside risk to their 3.5% Q4 real GDP estimate. \t\t\tToday’s CPI report for December will provide the latest verdict on \t\t\tthe efficacy of the Fed’s QE program. Our analysts are in line with \t\t\tthe consensus, and expect the core print to fall to +0.7% y\/y (prev. \t\t\t+0.8%). Retail sales, industrial production and University of \t\t\tMichigan confidence are also due, and our US economists are above \t\t\tconsensus for all three reports. We expect the dollar will continue \t\t\tto respond favourably to improving US economic figures
\n EUR<\/span><\/em><\/strong><\/p>\n

The euro’s stronger rally yesterday led us to close out our short \t\t\tEURUSD trade recommendation, but we retain our bearish view on the \t\t\tcurrency.
\nECB President Trichet’s comments at the policy press conference were \t\t\tslightly hawkish, suggesting that the ECB’s governing council is \t\t\tgrowing more concerned about inflationary pressures inside the \t\t\tEurozone. This was not entirely surprising given that December’s \t\t\tinitial CPI estimate came in above the ECB’s medium-term target of \t\t\t“below, but close to, 2%”. The final CPI estimates for December are \t\t\tdue for publication today, and any upward revisions are likely to be \t\t\teuro-supportive.
\nTrichet acknowledged the risk that the ECB could revise up its \t\t\tinflation outlook, but said that stronger inflation has so far not \t\t\timpacted the ECB’s assessment. He stressed that inflation \t\t\texpectations are still anchored, but sounded a vigilant note saying \t\t\tthat the ECB “are never precommitted not to move interest rates” and \t\t\treminded the audience that the ECB hiked in July 2008.
\nECB Executive Board member Stark did not appear to be in any hurry \t\t\tto tighten monetary policy. Referring to yesterday’s ECB meeting he \t\t\tsaid “we will monitor developments closely and the question is \t\t\twhether the upside risks that we spoke of today will materialise&we \t\t\tmust wait and see.” ECB Governing Council member Liikanen added that \t\t\tEurozone interest rates are appropriate in the current situation.
\nFrench President Sarkozy said he believes EURUSD is too high. There \t\t\twere further comments from Eurozone policymakers regarding the \t\t\trescue fund, with a German government spokesperson stating that \t\t\tincreasing the size of the EFSF is “not on the agenda”. German \t\t\tFinance Minister Schaeuble said any extension of the current rescue \t\t\tmechanism would send the wrong signal and said the German government \t\t\tcontinues to oppose a Euro-bond proposal. He also said the Eurogroup \t\t\tmeeting next week is unlikely to yield any results and the goal is \t\t\tto get a permanent safety net by March.
\n JPY<\/span><\/em><\/strong><\/p>\n

Prime Minister Kan has reshuffled his cabinet. Kaoru Yosano takes \t\t\tover from Kaeida as Minister for the Economy and Fiscal Policy. Our \t\t\tJGB rates strategist notes that Yosano lies on the hawkish side of \t\t\tthe fiscal debate, and is not an advocate of further monetary \t\t\teasing. Noda stays on as Finance Minister, which implies no change \t\t\tin FX intervention policy.
\n GBP<\/span><\/em><\/strong><\/p>\n

There was no change in MPC policy and we will wait for the minutes \t\t\ton Jan. 26 to see if sustained inflation levels are affecting MPC \t\t\tpolicymaker thoughts.
\nIndustrial production was slightly softer than expected at +0.4% m\/m<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nGBPUSD breaks 1.5822 resistance
\nEURUSD NEUTRAL As long as key resistance at 1.3500 holds, view \t\t\trecovery as correction. Initial support at 1.3089 while resistance \t\t\tis at 1.3433.
\nUSDJPY NEUTRAL Downside potential with break of 82.63; 83.67 and \t\t\t82.31 mark the near-term directional triggers.
\nGBPUSD BULLISH Rise through 1.5822 has exposed 1.5911 ahead of \t\t\t1.5965; support at 1.5719 yesterday’s low.
\nUSDCHF BULLISH Focus is on 0.9784; a break here would expose 0.9852. \t\t\tSupport is at 0.9605.
\nAUDUSD BEARISH The pair found support at 0.9804 ahead of 0.9753; \t\t\tresistance at 1.0020.
\nUSDCAD BEARISH Bear trend remains; eyeing 0.9849\/25, a break here \t\t\twould expose 0.9712. Resistance is at 0.9951.
\nEURCHF NEUTRAL Push above 1.2871 has exposed 1.3004; initial support \t\t\tat 1.2686.
\nEURGBP BEARISH Sharp rise through 0.8427 has exposed 0.8489; broader \t\t\tfocus is on the downside with initial support defined at 0.8313 \t\t\tyesterdays’ low.
\nEURJPY NEUTRAL Break of 110.24 due to heavy intraday upward movement \t\t\thas exposed 111.13 Fibonacci level; support lies at 108.69.<\/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 lack of newsflow during the Asia session ensured the price action was fairly subdued. Yesterday’s powerful euro advance has finally come to a halt, and the euro weakened slightly as the session wore on. EURUSD traded 1.3323-1.3373, USDJPY 82.49-82.86…<\/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-18091","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18091","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=18091"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18091\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=18091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=18091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=18091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}