{"id":18657,"date":"2011-01-26T09:14:46","date_gmt":"2011-01-26T14:14:46","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=18657"},"modified":"2011-01-26T09:14:46","modified_gmt":"2011-01-26T14:14:46","slug":"forex-daily-market-commentary-203","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/01\/26\/forex-daily-market-commentary-203\/","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

President Obama’s State of the Union address was a focal point \t\t\tduring the Asia session. Expectations had been building in the \t\t\tmarket, that Obama might incentivise US multinationals to repatriate \t\t\ttheir overseas earnings. The dollar was bought ahead of the speech \t\t\ton this, but sold off again when it became clear that no such \t\t\tproposal was in the pipeline. EURUSD traded 1.3633-1.3704, USDJPY \t\t\t81.98-82.39. The USD also enjoyed a temporary bounce earlier after a \t\t\tmuch stronger than expected January consumer confidence reading. The \t\t\tConference Board consumer confidence index rose 7.3 points to 60.6 \t\t\tin January (cons 54.0). US equities finished essentially flat on the \t\t\tday. The focus will now shift to the upcoming FOMC statement. Our \t\t\tanalysts do not think that the FOMC statement will suggest a \t\t\tnear-term change in monetary policy. However, investors will be \t\t\tfocused on the inflation outlook language and whether any of the new \t\t\tvoters on the committee dissent in a hawkish direction.
\n EUR<\/span><\/em><\/strong><\/p>\n

The first issuance of an EFSF bond saw strong demand. Orders of \t\t\tEUR44.5 bn were received for only EUR5 bn in issuance. EFSF CEO \t\t\tRegling expressed the hope that the bond issue could well be a \t\t\tturning point in the sovereign debt crisis. By contrast, our \t\t\tEuropean rates strategists continue to expect to see an escalation \t\t\tof the crisis.
\nECB Governing Council member Honohan said he would not expect an \t\t\t“abrupt response” in terms of the ECB’s monetary policy given that \t\t\tinflation expectations remain well-anchored. ECB Governing Council \t\t\tmember Nowotny said he does not expect a change in the policy rate \t\t\tin the first half of the year.
\n GBP<\/span><\/em><\/strong><\/p>\n

The GDP print for Q4 was poor, declining by 0.5% versus consensus at \t\t\t+0.5%. The ONS has said that the reading is due largely to the \t\t\tadverse weather conditions impacting the services sector, and \t\t\twithout this effect, the print would have been largely flat. \t\t\tHowever, even with this temporary weather effect, the number was \t\t\tdisappointing and casts doubt about the sustainability of the \t\t\trecovery in the UK.
\nBoE Governor King downplayed the significance of the weak GDP number \t\t\tand stressed the MPC’s commitment to low and stable inflation. He \t\t\tdid not seem in any hurry whatsoever to hike the policy rate. Our UK \t\t\teconomist does not expect the first hike come until Q3.
\nToday’s BoE minutes will likely sound more hawkish, simply because \t\t\tthe MPC will have had the high inflation print at that meeting, but \t\t\tthey will not have had today’s GDP data.
\n CAD<\/span><\/em><\/strong><\/p>\n

Canada inflation readings came in a bit under expectations for the \t\t\theadline and core inflation readings, weakening the Canadian dollar \t\t\tfor the session. Headline CPI rose 2.5% y\/y vs. expectations of 2.5% \t\t\ty\/y and core inflation rose 1.5% y\/y vs. expectations of 1.6% y\/y. \t\t\tWhile headline inflation is now above the mid-point of the Bank of \t\t\tCanada’s 1% – 3% inflation target range, core inflation remains \t\t\tsafely below, where it has resided for most of the past 3 years.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDCHF 0.9301 key support.
\nEURUSD BULLISH Outlook is bullish; rise through 1.3741\/86 resistance \t\t\tzone would expose 1.3825. Support at 1.3541.
\nUSDJPY BEARISH The pair eyes 81.85; Move below the level would \t\t\texpose 81.61 ahead of 80.93. Near-term resistance at 82.67.
\nGBPUSD BULLISH Next support below 1.5752 lies at 1.5702. Resistance \t\t\tat 1.6017 yesterday’s high.
\nUSDCHF BEARISH Violation of 0.9415 favors extension of losses \t\t\ttowards 0.9301 key low. Initial resistance is at 0.9523.
\nAUDUSD NEUTRAL Motion is sideways; 1.0077 and 0.9804 mark the \t\t\tnear-term directional triggers.
\nUSDCAD NEUTARL Initial resistance at 1.0031; support at 0.9909.
\nEURCHF BULLISH As long as support at 1.2815 holds view pullback as \t\t\tcorrection. Resistance at 1.3069.
\nEURGBP BULLISH Recovery has scope for 0.8691 next. Initial support \t\t\tlies at 0.8529.
\nEURJPY BULLISH Recovery stalled below 113.03; break of this would \t\t\texpose 113.59 Fibonacci level next. Initial support lies at 111.64.<\/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":"

President Obama’s State of the Union address was a focal point during the Asia session. Expectations had been building in the market, that Obama might incentivise US multinationals to repatriate their overseas earnings. The dollar was bought ahead of the speech on this…<\/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-18657","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18657","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=18657"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18657\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=18657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=18657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=18657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}