{"id":20205,"date":"2011-03-18T08:30:09","date_gmt":"2011-03-18T12:30:09","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=20205"},"modified":"2011-03-18T08:30:09","modified_gmt":"2011-03-18T12:30:09","slug":"forex-daily-market-commentary-concerted-intervention-of-jpy-agreed","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/03\/18\/forex-daily-market-commentary-concerted-intervention-of-jpy-agreed\/","title":{"rendered":"Forex Daily Market Commentary: Concerted intervention of JPY agreed"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)<\/strong><\/strong>
\n
\nUSD<\/em><\/strong><\/p>\n

In a surprise development, the Fed, the ECB, the Bank of England, and the Bank of Canada agreed to engage in \u201cconcerted intervention\u201d with the Bank of Japan \u201con March 18, 2011\u2033. The communique explained that the decision to intervene was taken \u201cin response to recent movements in the exchange rate of the yen associated with the tragic events in Japan\u201d. The text also repeated the G7\u2032s concern over \u201cexcess volatility and disorderly movements in exchange rates\u201d. Speaking later, Japan Finance Minister Noda made it clear that the BoJ would be active in USDJPY, but he was not sure in which pairs the other banks would intervene. The yen weakened v sharply on the announcement, and USDJPY continued to grind higher during the Asia session. EURUSD traded 1.3981-1.4088, USDJPY 78.83-81.89. Elsewhere, WTI crude jumped about $2\/bbl on news that the UN security council authorised a no-fly zone over Libya, and approved \u201call necessary measures\u201d to protect Libyan civilians. US data offered some positives for the dollar, though market participants continue to largely overlook releases. Initial jobless claims fell as expected and continue to signal an improving labor market. CPI rose as expected while core was stronger. Our analysts noted that core CPI on a y\/y basis should put pressure on the Fed to reconsider their assessment mentioned in the March 15 FOMC statement that \u201cunderlying\u201d inflation is \u201csubdued\u201d, especially with a strengthening labor market.
\n
\nEUR<\/em><\/strong><\/p>\n

The euro held onto its early-European session gains stemming from the strong Spanish bond auction. The Spanish bond auction was considered to be strong as the bid to cover ratio for the 10-year came in at 1.81x vs. 1.54x prior. Considering the state of the market the periphery bond market is faring quite well, but we believe the market is struggling to absorb all the event risk at this stage so price action may be delayed.
\nECB President Trichet speaks in Frankfurt around 1600GMT and he may wish to address the decision to embark on a round of joint intervention. On the monetary policy front, given recent comments from the ECB\u2019s Liikanen who still pointed to an April rate hike, we would not expect too much of a departure from the last time we heard Trichet speak.
\n
\nCHF<\/em><\/strong><\/p>\n

The SNB kept its 3m LIBOR target unchanged at 0.25%, though we judge the SNB statement to be more dovish, which is negative for the franc. The longer-term trajectory of the inflation forecast was largely kept unchanged but even so, inflation is only expected to hit 2% in 2013 which is well beyond the necessities of short-term action. The SNB expressed particular concern about other global developments and its impact on Swiss markets, and this will likely remain the driving theme within the policymaking community.
\nSNB Chairman Hildebrand later said the strong Swiss franc remains a burden for the economy and could lead to a slowdown throughout the year through exports.<\/p>\n

TECHNICAL OUTLOOK<\/strong>
\nEURUSD 1.4282 key resistance.
\nEURUSD BULLISH Rise above 1.4086 has exposed 1.4282 key high from Nov 4. Initial support lies at 1.3855.
\nUSDJPY BEARISH Recovery targets 82.01 with scope for 82.45 next, while support is at 78.83 intraday low.
\nGBPUSD BEARISH Look for a break below 1.5964, which would confirm the bear trend and open the way to 1.5845. Near-term resistance lies at 1.6200.
\nUSDCHF BEARISH The pair found support at 0.8852 ahead of 0.8795. Initial resistance is at 0.9198.
\nAUDUSD BEARISH As long as resistance at 0.9963 is intact, a break below 0.9706 would expose 0.9625.
\nUSDCAD BULLISH While support at 0.9735 holds, look for gains towards 0.9974 and 1.0011\/58 resistance area.
\nEURCHF BEARISH Bounce off through 1.2706 exposes 1.2854. Near-term support lies at 1.2571 ahead of 1.2433\/02 support zone.
\nEURGBP BULLISH Focus is on 0.8787 Fibonacci level, break of this would expose 0.8818. Near-term support is at 0.8626.
\nEURJPY BEARISH Resistance at 116.00\/68 area, while support is at 110.54 intraday low.<\/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":"

In a surprise development, the Fed, the ECB, the Bank of England, and the Bank of Canada agreed to engage in \u201cconcerted intervention\u201d with the Bank of Japan \u201con March 18, 2011\u2033. The communique explained that the decision to intervene was taken \u201cin response to recent movements in the exchange rate of the yen associated with the tragic events in Japan\u201d…<\/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-20205","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20205","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=20205"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20205\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=20205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=20205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=20205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}