{"id":18881,"date":"2011-01-31T08:30:55","date_gmt":"2011-01-31T13:30:55","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=18881"},"modified":"2011-01-31T08:30:55","modified_gmt":"2011-01-31T13:30:55","slug":"forex-daily-market-commentary-206","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/01\/31\/forex-daily-market-commentary-206\/","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

A distinct risk-off mood took hold at the Asia open after civil \t\t\tunrest in Egypt escalated over the weekend. Both the dollar and the \t\t\tyen initially found support on safe-haven demand, but sentiment soon \t\t\tsteadied when no signs of a further deterioration in the political \t\t\tsituation materialised. EURUSD traded 1.3571-1.3615, USDJPY \t\t\t81.78-82.23. Non-Chinese Asian equities lost ground after the S&P \t\t\t500 finished -1.79% lower on Friday. The VIX also rose 24% to 20.04, \t\t\tit’s highest close since Dec. 1. WTI crude remains elevated although \t\t\tit has slipped back below $90\/bbl at the time of writing. Although \t\t\tUS Q4 GDP fell short of consensus expectations, it still managed to \t\t\taccelerate to a +3.2% annualised rate (cons. 3.5%) from a pace of \t\t\t2.6% in Q3. Our analysts see cause for optimism in the composition \t\t\ttoo, noting that the private demand component has surged ahead, \t\t\teasily surpassing their expectations. The University of Michigan \t\t\tconfidence report came in above consensus at 74.2 (cons. 73.3). \t\t\tElevated geopolitical tensions will likely continue to lend the \t\t\tdollar some near-term support while, over the medium term, we see \t\t\tfurther dollar strength coming through as the US recovery \t\t\taccelerates.
\n EUR<\/span><\/em><\/strong><\/p>\n

German Finance Minister Schaeuble gave a relatively upbeat \t\t\tassessment of the current phase of the Eurozone’s sovereign debt \t\t\tcrisis. He said he did not expect any further “major shocks”, and \t\t\tpredicted the euro would be “stable”. He added the Eurozone would \t\t\tlearn lessons from the crisis and “create instruments to defend the \t\t\twhole Eurozone”. France’s Finance Minister Lagarde took a similar \t\t\tview, saying the Eurozone has “turned the corner”.
\nReuters, citing unnamed sources, said a proposal is being considered \t\t\tto extend the maturity of rescue loans offered to both Greece and \t\t\tIreland. The timeline allegedly being discussed is 30 years.
\nGreek Prime Minister Papandreou said that Eurozone governments are \t\t\tconsidering a proposal to allow EU institutions to recapitalize \t\t\tbanks.
\nAustrian Chancellor Faymann indicated he would prefer a speedy \t\t\tconclusion to discussions surrounding a re-design of the EFSF. He \t\t\tsaid: “The problem must be solved in March, the sooner the \t\t\tbetter&Continual discussions about this are anything other than \t\t\thelpful.”
\nIrish Prime Minister Cowen said he would dissolve parliament on \t\t\tTuesday and call a general election. Both the upper and lower houses \t\t\tof parliament have now passed the key Finance Bill that gives legal \t\t\teffect to the budget proposals announced in December.
\n JPY<\/span><\/em><\/strong><\/p>\n

Senior Vice Finance Minister Igarashii described the yen as \t\t\t“overvalued” on the basis of “Japan’s price levels and other \t\t\tfactors”. He warned that Japan will “take decisive steps if there is \t\t\tspeculative, excessive movement” in the exchange rate.
\n AUD<\/span><\/em><\/strong><\/p>\n

Private sector credit growth rose only +0.2% m\/m in December (cons. \t\t\t0.3%), but the annualized figure was in line at +3.4% y\/y. Our \t\t\tAustralian economics team think this latest data point challenges \t\t\tthe notion that the domestic economy is “strong”, and they expect \t\t\tthe RBA to lower its near-term GDP and underlying inflation \t\t\tforecasts on Friday. Our analysts still look for the next RBA hike \t\t\tto come in H2.
\n CAD<\/span><\/em><\/strong><\/p>\n

Bank of Canada Governor Carney said that “persistent strength” in \t\t\tthe CAD is a threat to Canada’s economic growth.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDCHF pressures 0.9390 support
\nEURUSD BULLISH Resistance at 1.3786 holds while support zone is at \t\t\t1.3573\/41.
\nUSDJPY BEARISH Break of 81.85 has exposed 81.61 ahead of 81.23. \t\t\tResistance at 82.93 Friday’s high.
\nGBPUSD BULLISH Support at 1.5752 holds, focus is on 1.6017 ahead of \t\t\t1.6059 next.
\nUSDCHF BEARISH Pressure on 0.9390, breach of this level would expose \t\t\t0.9301 key low. Initial resistance is at 0.9523.
\nAUDUSD BEARISH Support zone at 0.9833\/04 holds. Near-term resistance \t\t\tis at 1.0022.
\nUSDCAD NEUTRAL 1.0067 and 0.9838 mark the near term directional \t\t\ttriggers.
\nEURCHF NEUTRAL Pressure builds on initial support 1.2774, near term \t\t\tresistance lies at 1.3002.
\nEURGBP BULLISH Focus is on 0.8672\/91 resistance zone. Initial \t\t\tsupport lies at 0.8529.
\nEURJPY BULLISH Upside potential with resistance at 114.01\/94, breach \t\t\tof this zone would expose 115.68 next. Initial support lies at \t\t\t110.51.<\/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":"

A distinct risk-off mood took hold at the Asia open after civil unrest in Egypt escalated over the weekend. Both the dollar and the yen initially found support on safe-haven demand, but sentiment soon steadied when no signs of a further deterioration…<\/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-18881","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18881","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=18881"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/18881\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=18881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=18881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=18881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}