{"id":19068,"date":"2011-02-04T07:42:06","date_gmt":"2011-02-04T12:42:06","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19068"},"modified":"2011-02-04T07:42:06","modified_gmt":"2011-02-04T12:42:06","slug":"forex-daily-market-commentary-209","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/02\/04\/forex-daily-market-commentary-209\/","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

With much of Asia still on holiday, FX price action was largely \t\t\tsubdued overnight. However, AUDUSD did receive a strong boost when \t\t\tthe RBA kept the forecasts for 2011 and 2012 inflation unchanged, \t\t\tdespite the flooding. EURUSD traded 1.3609-1.3652, USDJPY \t\t\t81.45-81.70. Fed Chairman Bernanke’s economic assessment largely \t\t\techoed the latest FOMC statement. The Nikkei-225 is up just over 1% \t\t\tat the time of writing.
\nUS data supported our analysts’ call for faster Q1 growth as \t\t\tnon-manufacturing ISM surged to the highest level since 2005, and \t\t\twas well above expectations. We continue to expect real GDP growth \t\t\tin the current Q1 to accelerate to 4.2% from 3.2% in Q4 despite the \t\t\tunusually inclement weather that is temporarily delaying\/postponing \t\t\tsome economic activity. New jobless claims fell slightly more than \t\t\tanticipated to 415k. Wintry weather has resulted in unusually choppy \t\t\tdata in January and we expect the weather to also affect the January \t\t\tpayrolls. Our US economists forecast a +80k rise in headline \t\t\tpayrolls, well below the consensus of +143k.
\n EUR<\/span><\/em><\/strong><\/p>\n

The messages conveyed by European Central Bank President Trichet at \t\t\tthe Feb. 3 press conference were pretty much the same as those of \t\t\tthe Jan. 13 press conference. However, what the FX market was \t\t\tinclined to hear and how it interpreted Trichet on each occasion \t\t\tmade all the difference to the euro. Going into last month’s meeting \t\t\tthe market expected nothing new and heard hawkishness. EURUSD \t\t\tpopped. This time the market expected hawkishness and heard nothing \t\t\tnew. EURUSD dropped. Like last month, Trichet put inflation front \t\t\tand center in his remarks. But while he again noted evidence of \t\t\tshort-term upward pressure, mostly because of energy prices, he \t\t\tqualified this by saying that the current situation didn’t appear to \t\t\tpose any danger to price stability over the medium term. He then \t\t\temphasized that it’s the immediate term that counts. There were no \t\t\thints of dovishness but certainly not enough hawkishness to meet \t\t\tmarket expectations.
\nGerman Chancellor Merkel said there will be no concrete decisions at \t\t\tthe upcoming EU summit though she did say the Eurozone has to take \t\t\timportant steps by the end of March on stability, growth and \t\t\tcompetitiveness because if the euro fails, Europe fails.
\nServices PMIs were mixed. Germany’s reading rose to 60.3 from \t\t\tDecember, close to all time highs, and the French print rose to \t\t\t57.8. However, peripheral readings are stabilizing but remain far \t\t\tfrom the levels of the Eurozone core. Eurozone retail sales declined \t\t\tunexpectedly by 0.6% m\/m, but this could have resulted from poor \t\t\tweather.
\n GBP<\/span><\/em><\/strong><\/p>\n

Sterling was supported by the Services PMI which came in above \t\t\tconsensus at 54.50, and rose substantially from the prior reading of \t\t\t49.7.
\n CHF<\/span><\/em><\/strong><\/p>\n

Our analysts pushed back their SNB policy rate move forecast to \t\t\tJune, from March. Although the latest Swiss economic indicators have \t\t\tbeen anything but disastrous, Swiss franc strength has weighed on \t\t\tofficials. The SNB has kept policy expansive as judged by lower \t\t\tshort-term rates. Our main scenario now calls for a an increase in \t\t\tthe SNB’s 3m CHF Libor target by 25bp to 50bp at the June MPA.
\n AUD<\/span><\/em><\/strong><\/p>\n

The RBA’s Statement on Monetary Policy concluded that the economic \t\t\timpact of the floods would be temporary, echoing comments made in \t\t\tTuesday’s policy statement. The 2010 GDP forecast was revised down \t\t\tto 2.75% from the previous estimate of 3.5%, but the 2011 GDP \t\t\tforecast was raised to 4.25% from 3.75% previously. No change was \t\t\tmade to the 2011 or 2012 forecasts for core inflation.
\n CAD<\/span><\/em><\/strong><\/p>\n

Our Canadian economists expect a modest net increase in employment \t\t\tof 10.0k (consensus 15.0k). Canadian Finance Minister Flaherty has \t\t\talready warned of potential challenges regarding jobless numbers, \t\t\twhich seems to support our below-consensus forecast.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nEURUSD stalls in front of 1.3888\/1.3948.
\nEURUSD BULLISH Stalled in front of 1.3888\/1.3948 resistance zone. \t\t\tInitial support lies at 1.3571.
\nUSDJPY BEARISH Support lies at 81.31, break below this would expose \t\t\t80.93 next. Resistance at 82.15.
\nGBPUSD BULLISH Focus is on 1.6299 key high with scope for 1.6379 \t\t\tnext. Support lies at 1.6010.
\nUSDCHF BEARISH While initial resistance is at 0.9526, focus is on \t\t\t0.9329\/01 support zone.
\nAUDUSD BULLISH Breach of 1.0149 has put focus on key resistance \t\t\t1.0256 next. Support lies at 1.0083 yesterday’s low.
\nUSDCAD BEARISH Momentum is negative; break of 0.9861\/38 support area \t\t\twould expose 0.9820. Near term resistance at 0.9978.
\nEURCHF BULLISH Rise through 1.3002 has exposed 1.3069 ahead of \t\t\t1.3118. Support at 1.2781.
\nEURGBP NEUTRAL Sharp fall through 0.8510 puts pressure on 0.8433, \t\t\tbreak of this would expose 0.8413 next. On the upside initial \t\t\tresistance is defined at 0.8533.
\nEURJPY NEUTRAL Decline through 111.28 has turned the model to \t\t\tneutral; 112.92 and 110.32 mark the near term directional triggers.<\/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":"

With much of Asia still on holiday, FX price action was largely subdued overnight. However, AUDUSD did receive a strong boost when the RBA kept the forecasts for 2011 and 2012 inflation unchanged, despite the flooding. EURUSD traded 1.3609-1.3652, USDJPY 81.45-81.70.<\/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-19068","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19068","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=19068"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19068\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=19068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=19068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=19068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}