{"id":18751,"date":"2011-01-27T08:25:56","date_gmt":"2011-01-27T13:25:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=18751"},"modified":"2011-01-27T08:25:56","modified_gmt":"2011-01-27T13:25:56","slug":"forex-daily-market-commentary-204","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/01\/27\/forex-daily-market-commentary-204\/","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 was largely unchanged against the euro during the Asia \t\t\tsession, but relinquished some ground to the yen. EURUSD traded \t\t\t1.3641-1.3714. USDJPY traded 82.02-82.61. The FOMC kept current \t\t\tpolicy unchanged, given it still has concerns about low inflation \t\t\tand a weak labour market. No dissenting votes were cast. Clearly, \t\t\talthough regional Fed Presidents Plosser and Fisher have publicly \t\t\texpressed some misgivings about QE2, they are willing to go along \t\t\twith the existing asset purchase program for now at least. \t\t\tIntriguingly, the policy statement appeared to signal a possible \t\t\tslowdown in the pace of UST purchases before the end of June, which \t\t\twould result in a more gradual end to the program. Any decline in \t\t\tthe pace of purchases likely reduces the risk of an extension of the \t\t\tprogram beyond the end of June. This is entirely consistent with the \t\t\tviews of our analyst team who continue to expect an end to asset \t\t\tpurchases in June, followed by the first rate hike in Q1 2012. \t\t\tElsewhere, the CBO markedly increased its budget deficit forecast \t\t\tfor the current fiscal year to $1.5 trn from $1.06 trn.
\n EUR<\/span><\/em><\/strong><\/p>\n

ECB’s Nowotny said that markets were “too euphoric” about possible \t\t\tchanges to Europe’s financial rescue mechanisms. He added that even \t\t\tif a Eurozone country were to restructure its sovereign debt, “the \t\t\tcountry would still remain in the Eurozone”.
\nECB President Trichet said he would not exclude the possibility of a \t\t\trevamped financial rescue mechanism having the right to buy bonds, \t\t\tas this would be “useful in certain circumstances”. ECB Governing \t\t\tCouncil member Noyer agreed, noting that having the capacity “to \t\t\tintervene in secondary markets” would be “an interesting feature in \t\t\tsome cases”. Both Trichet and Noyer stressed however that any \t\t\tenhancement to the rescue facility is ultimately a decision for \t\t\tgovernments.
\nECB Executive Board member Stark said that, although interest rates \t\t\tare currently appropriate, the ECB “are ready to act at any moment, \t\t\tshould it become necessary”. ECB Governing Council member Quaden \t\t\tsaid he is concerned about Belgian inflation and the ECB would \t\t\t“follow closely the evolution of the situation and we will evaluate \t\t\tand react if it is necessary”. Noyer and that he was “quite \t\t\tconfident that we will be able to keep inflation at bay” adding that \t\t\the was not signaling that the ECB is “going to raise interest \t\t\trates\u201d.
\n GBP<\/span><\/em><\/strong><\/p>\n

The minutes of the BoE’s Jan. 13 policy meeting revealed a further \t\t\tshift towards the hawkish end of the policy spectrum. Two votes were \t\t\tcast in favour of a policy rate hike, up from one previously: MPC \t\t\tmember Weale now joins MPC member Sentence in calling for a 25bp \t\t\thike. Also, some of those who had concerns over inflationary \t\t\tpressures but still voted for no change, said their decisions were \t\t\t‘finely balanced’. Clearly such hawkish sympathies could easily \t\t\ttranslate into dissenting votes at a future meeting. MPC member \t\t\tPosen continued to vote for a resumption of the QE program and, as \t\t\tbefore, advocated a further ?50 bn in asset purchases. However, when \t\t\tthe vote was taken, it was not yet known that GDP had suffered a \t\t\t-0.5% q\/q contraction in Q4. This new piece of data would likely \t\t\thave surprised the MPC, and may give hawkish members some grounds to \t\t\treconsider their stance.
\n AUD<\/span><\/em><\/strong><\/p>\n

The AUD fell after Australian Prime Minister Gillard announced the \t\t\tintroduction of a new tax to fund reconstruction projects in the \t\t\twake of the extensive floods. She hopes that the tax will ultimately \t\t\traise A$1.8 bn. She estimated the total direct costs of the clean-up \t\t\toperation to the federal government would run to A$5.6 bn.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nGBPUSD support at 1.5752.
\nEURUSD BULLISH Big external resistance zone is at 1.3741\/86; break \t\t\tthrough this would expose 1.3825. Support at 1.3573.
\nUSDJPY BEARISH Remains bearish with focus on 81.85; breach of this \t\t\tlevel would expose 81.61 ahead of 80.93. Near-term resistance is at \t\t\t82.67.
\nGBPUSD BULLISH Next support below 1.5752 lies at 1.5702. Initial \t\t\tresistance is at 1.6017.
\nUSDCHF BEARISH Negative momentum with focus on 0.9301 key low. \t\t\tInitial resistance is at 0.9523.
\nAUDUSD NEUTRAL 1.0077 and 0.9804 mark the near-term directional \t\t\ttriggers.
\nUSDCAD NEUTRAL While initial resistance is at 1.0031 support lies at \t\t\t0.9909.
\nEURCHF BULLISH Positive momentum with resistance at 1.3069 ahead of \t\t\t1.3118. Near term support is defined at 1.2815.
\nEURGBP BULLISH Momentum is constructive with focus on resistance at \t\t\t0.8691 Fibonacci level. Initial support lies at 0.8529.
\nEURJPY BULLISH Stalled in front of 113.03; breach of this level \t\t\twould expose 113.59 Fibonacci level next. Initial support lies at \t\t\t111.64.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/span><\/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 was largely unchanged against the euro during the Asia session, but relinquished some ground to the yen. EURUSD traded 1.3641-1.3714. USDJPY traded 82.02-82.61. The FOMC kept current policy unchanged, given it still has concerns about low inflation and a weak labour market.<\/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-18751","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18751","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=18751"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18751\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=18751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=18751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=18751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}