{"id":19755,"date":"2011-02-23T08:10:12","date_gmt":"2011-02-23T13:10:12","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19755"},"modified":"2011-02-23T08:10:12","modified_gmt":"2011-02-23T13:10:12","slug":"forex-daily-market-commentary-221","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/02\/23\/forex-daily-market-commentary-221\/","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

An uneasy calm descended over FX markets during the Asia session, \t\t\tand risk currencies managed to hold their ground despite continuing \t\t\tconcerns about Libya. The dollar fell further against the yen, but \t\t\thas steadied against the Swiss franc. EURUSD traded 1.3649-1.3712, \t\t\tUSDJPY 82.53-82.89. AUDUSD crept back above parity although there \t\t\tseemed to be little conviction behind the move. NZDUSD continues to \t\t\tlanguish sub-0.75. The euro remains supported on expectations of a \t\t\thawkish ECB press conference next week. The S&P 500 fell just over \t\t\t2%, registering its worst one-day fall since August. WTI and Brent \t\t\tare $95.57 and $106.45, respectively, and gold is $1399.83 at the \t\t\ttime of writing. On the US data front, both consumer confidence and \t\t\tthe Richmond Fed manufacturing survey showed upside surprises. \t\t\tS&P\/Case-Shiller data registered another decline in house prices. \t\t\tWith few top-tier data releases in the US ahead, external events \t\t\twill remain the larger driver of risk sentiment and we should \t\t\tcontinue to see a bifurcation of dollar performance, as it benefits \t\t\tas a safe haven versus the higher-beta currencies but struggles \t\t\tagainst the Swiss franc and the yen as market participants remain \t\t\tundecided on US recovery prospects.
\n EUR<\/span><\/em><\/strong><\/p>\n

The euro was supported by hawkish comments from the ECB’s Mersch. \t\t\tWhile his tone was not particularly surprising, comments indicating \t\t\tthe possibility of hiking rates with temporary liquidity measures \t\t\tstill in place and the specific mention of the March 3 ECB meeting \t\t\tpiqued interest. We believe the ECB will also have updated forecasts \t\t\tat that meeting and Mersch said the ECB may warn of “upside \t\t\tinflation risks” then. S&P later cautioned that Spain still has \t\t\tsignificant downside risks to its AA credit rating and could face \t\t\tfurther problems in obtaining financing in the markets. S&P also \t\t\tsaid Spain has not done enough to “radically overhaul [its] labour \t\t\tmarket.” S&P has the lowest rating on Spain among the three major \t\t\tratings agencies but the euro nevertheless managed to hold on to \t\t\tsome of its earlier gains.
\nGerman Chancellor Merkel said the EU may consider extending the \t\t\tperiod for the Greek bailout plan. She said any extension would have \t\t\tto be part of a larger, more comprehensive solution and that Germany \t\t\twould present initial proposals at the specially called March 11 EU \t\t\tsummit.
\n GBP<\/span><\/em><\/strong><\/p>\n

The BoE’s Posen and Tucker were on the newswires yesterday. Posen \t\t\tagain sounded dovish as he said it would be a mistake to raise the \t\t\tBoE policy rate just “for the sake” of it and he did not rule out \t\t\tthe possibility of deflation should the BoE raise rates right now. \t\t\tTucker said the recovery could take a while longer and the BoE faces \t\t\ta dilemma on interest rates. He said inflation is a worry and that \t\t\tthe BoE would need to raise rates rapidly in order to get CPI down \t\t\tquickly.
\nUp next are the BoE MPC minutes from the Feb 10 meeting. The vote \t\t\tsplit will be the focus, as at least one other member is likely to \t\t\thave joined Andrew Sentance and Martin Weale in voting for a rate \t\t\thike. But even if there is no shift in the voting stance, the \t\t\tcommentary will likely suggest that many members were close to \t\t\tvoting to raise interest rates. While a third hawkish voter would \t\t\tnot tip the scales overwhelmingly in favour of an imminent policy \t\t\trate hike, continued hawkish overtones should keep sterling \t\t\tsupported in the near term, especially as BoE hiking expectations \t\t\tremain elevated.
\n AUD<\/span><\/em><\/strong><\/p>\n

RBA Governor Stevens repeated that AUD strength should help contain \t\t\tinflation. He added that, although he is uncertain how long the boom \t\t\tin the terms of trade will last, it does seem persistent.
\n NZD<\/span><\/em><\/strong><\/p>\n

Prime Minister Key has declared a national state of emergency \t\t\tfollowing yesterday’s earthquake in Christchurch.
\nFinance Minister English said the RBNZ may consider the impact of \t\t\tyesterday’s earthquake in its rate decisions. RBNZ Governor Bollard \t\t\tissued a statement on the disaster but made no mention of monetary \t\t\tpolicy.
\nMoody’s said the quake would have no immediate impact on New \t\t\tZealand’s Aaa rating, but warned that the country is at risk of \t\t\tmoving back into recession.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nEURJPY 114.94 resistance.
\nEURUSD BULLISH The pair targets 1.3744, break here would expose \t\t\t1.3826. On the downside, initial support is at 1.3525 intraday low \t\t\tahead of 1.3463.
\nUSDJPY BULLISH As long as 82.34 continue to cap the downside risks, \t\t\texpect recovery towards 83.98.
\nGBPUSD BULLISH Stalled in front of 1.6279\/99 resistance zone. \t\t\tSupport is defined at 1.6076.
\nUSDCHF BEARISH Focus is on 0.9329\/01 support area. Initial \t\t\tresistance at 0.9539.
\nAUDUSD BULLISH Initial resistance lies at 1.0158 ahead of 1.0200 \t\t\twhile near-term support is defined at 0.9944.
\nUSDCAD BEARISH Initial support is at 0.9816 ahead of 0.9745\/12 area.
\nEURCHF NEUTRAL 1.3029 and 1.2774 mark the near term bull and bear \t\t\ttriggers respectively.
\nEURGBP BEARISH Break of 0.8356 would open way towards 0.8332\/13 \t\t\tsupport zone. Resistance is at 0.8514.
\nEURJPY BULLISH Support at 112.09 holds, while a break above 114.94 \t\t\twould expose 115.42\/68 zone.<\/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":"

An uneasy calm descended over FX markets during the Asia session, and risk currencies managed to hold their ground despite continuing concerns about Libya. The dollar fell further against the yen, but has steadied against the Swiss franc.<\/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-19755","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19755","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=19755"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19755\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=19755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=19755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=19755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}