{"id":19140,"date":"2011-02-07T08:36:58","date_gmt":"2011-02-07T13:36:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19140"},"modified":"2011-02-07T08:36:58","modified_gmt":"2011-02-07T13:36:58","slug":"forex-daily-market-commentary-210","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/02\/07\/forex-daily-market-commentary-210\/","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 price action during the Asia session was subdued relative to the \t\t\tfrenetic activity seen after Friday’s payrolls report, with USDJPY \t\t\tlocked in a particularly tight range. However, the dollar did \t\t\tsurrender some of Friday’s gains overnight. EURUSD traded \t\t\t1.3547-1.3624, USDJPY 82.16-82.29. On Friday, the headline payrolls \t\t\tnumber only gained +36k in January, falling well short of consensus \t\t\texpectations for a +146k increase. But the market seemed content to \t\t\tattribute the weaker print to inclement weather, and focused instead \t\t\ton the lower unemployment rate which unexpectedly fell sharply to \t\t\t9.0% (cons. 9.5%). In response, the US 10-year Treasury yield \t\t\tclimbed significantly higher, and peaked just above 3.66%, reaching \t\t\tlevels not seen since May 2010. The S&P 500 finished 0.29% ahead. \t\t\tGiven the scale of the surprise, our US economists have lowered \t\t\ttheir end-2011 unemployment rate forecast, and now expect it to fall \t\t\tto 8.8%, instead of 9.0% previously. They also now see upside risks \t\t\tto their 4.2% forecast for Q1 GDP growth. These latest developments \t\t\tbode well for our view that the dollar is poised to become a growth \t\t\tcurrency. The long-awaited semi-annual Treasury report on \t\t\tInternational Economic and Exchange Rate Policies was finally \t\t\tpublished, having been delayed since October. No major trading \t\t\tpartners of the US were deemed to have manipulated their currencies \t\t\tto gain “unfair competitive advantage in international trade”.
\n EUR<\/span><\/em><\/strong><\/p>\n

As expected at Friday’s EU Summit, no concrete decisions were taken \t\t\tregarding the future of Europe’s financial rescue mechanisms. EU \t\t\tCouncil President Von Rompuy pledged that a comprehensive package of \t\t\tanti-crisis measures would instead be adopted in March.
\nGermany’s Chancellor Merkel said a special summit of Eurozone-only \t\t\tstates would be held at an unspecified date after March 9.
\nECB Executive Board member Gonzalez-Paramo said that the ECB would \t\t\thave to hike rates if CPI inflation did not begin to drop again by \t\t\tyear-end.
\nFrance’s Finance Minister Lagarde said Eurozone leaders are \t\t\t“politically determined to defend the zone and the currency”.
\n JPY<\/span><\/em><\/strong><\/p>\n

BoJ Governor Shirakawa said further asset buying could be \t\t\tconceivable if the performance of the domestic economy fails to \t\t\tmatch the BoJ’s forecasts. He also sounded cautious on Japan’s \t\t\tdeteriorating fiscal position, noting that the lesson of history is \t\t\tthat no country can continue to run a deficit forever. However he \t\t\tnoted that JGB yields have been relatively stable, partly on the \t\t\tbelief that Japan is determined to carry out the necessary fiscal \t\t\tconsolidation.
\n AUD<\/span><\/em><\/strong><\/p>\n

December retail sales grew by only +0.2% m\/m, falling well short of \t\t\tthe consensus expectations of +0.5% m\/m growth. The AUD was briefly \t\t\thit on the numbers but soon steadied and spent the rest of the Asia \t\t\tsession creeping higher. Our Australian economics team expects a \t\t\tsoft print in January too, as sales are likely to be significantly \t\t\thurt by the Queensland floods. Our economists continue to see the \t\t\tnext lift in the cash rate in H2, probably in either August or \t\t\tSeptember.
\n CAD<\/span><\/em><\/strong><\/p>\n

USDCAD fell sharply to a low of 0.9832 on Friday, reaching levels \t\t\tnot seen since May 2008. A particularly strong employment report was \t\t\tthe trigger for the move. In January, 69.2k new jobs were created, \t\t\twell above expectations of only a 15.0k gain. The unemployment rate \t\t\tunexpectedly rose to 7.8%, but a corresponding increase in the \t\t\tparticipation rate was largely to blame.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDJPY clears 81.31
\nEURUSD BULLISH Move above 1.3741 is required to refocus towards \t\t\t1.3862 recent high while support lies at 1.3482.
\nUSDJPY BEARISH Violation of 81.31 has exposed 80.93 ahead of 80.54. \t\t\tResistance at 82.93.
\nGBPUSD BULLISH Push above 1.6279\/99 resistance zone would expose \t\t\t1.6379. Initial support is defined at 1.6037.
\nUSDCHF NEUTRAL Rise above 0.9526 has exposed 0.9623, support is at \t\t\t0.9451\/0.9396 zone.
\nAUDUSD BULLISH Focus is towards 1.0256 key resistance. Support lies \t\t\tat 1.0083.
\nUSDCAD BEARISH The pair targets 0.9832\/20. Near term resistance at \t\t\t0.9932.
\nEURCHF BULLISH Rise above 1.3069 would open up the way towards \t\t\t1.3118. Support at 1.2781.
\nEURGBP NEUTRAL 0.8533 and 0.8377 mark the near term directional \t\t\ttriggers.
\nEURJPY NEUTRAL Remains neutral; 112.92 and 110.32 mark the near term \t\t\tresistance and support level respectively.<\/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 price action during the Asia session was subdued relative to the frenetic activity seen after Friday’s payrolls report, with USDJPY locked in a particularly tight range. However, the dollar did surrender some of Friday’s gains overnight. EURUSD traded 1.3547-1.3624, USDJPY 82.16-82.29. <\/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-19140","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19140","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=19140"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19140\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=19140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=19140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=19140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}