China Dismissive Of Their Role In Yuan Valuation

Daily Forex Fundamentals | Written by AC-Markets | Nov 20 09 10:53 GMT |

News and Events: The consolidation of the USD and moderation in risk appetite continues today as a barren data schedule provides little impetus for a break out in major currency pair ranges. Today's docket is solely occupied with policy maker speeches, but even yesterday's offerings from Geithner, Fisher and Trichet were muted in impact on FX markets. The most newsworthy element from Geithner's address to the Joint Economic Committee yesterday was the palpable sense of frustration at a lack of progress on China' attitude to yuan valuation and global rebalancing. As much as US officials may wax lyrical on the progress made by President Obama's visit to the Far East, the fact remains that the Chinese have little to no motivation to change tack on their currency stance now, and as such, the CNY is not going anywhere. To further undermine the alleged progress US officials have made on the issue, overnight comments from China central bank Governor Zhou Xiaochaun made the analogy of China's involvement in the currency as 'like watching a tournament'. He expanded further that 'We just watch the game. Regardless who wins or loses, the issue of whether the winner or loser benefits the spectator doesn't arise'. Hardly rhetoric likely to encourage progress on the issue. For the rest of the day, only Trichet's speech in Frankfurt remains to watch, and of course the possible expiry of the rumoured EURUSD option structure with barriers at 1.4800 and 1.5100. All signs point to a slow day's trading ahead Today Key Issues: 10:30 EUR ECB Trichet Speaks In Frankfurt The Risk Today: EurUsd The range trade continues as we consolidate between 1.4800 and 1.4990; and with very little momentum provided by the light news calendar, there remains decent support and resistance building up at those levels. Only an hourly close above 1.4994 or break lower through 1.4800 negates this scenario. GbpUsd As we guessed yesterday, GBPUSD broke through the1.6663 support and rising wedge uptrend yesterday and now looks to target 1.6272 support below where the lower limit of the bullish trend comes in. Near term resistance comes in at yesterday's high 1.6745, but a break above there would suggest a possible test of 1.6870. UsdJpy The downtrend remains firmly entrenched as recent support turned ressistance at 89.10 capped the pair overnight. Expect the downwards momentum to retest 88.60 near term support, and after that a look at 88.00 resistance. UsdChf The pattern of higher lows over the week looks to be forming an ascending traingle formation with horizontal ressitance in that 1.0186 - 1.0205 zone; an area of supply that has so far contained rallies on the last 6 attempts. The 1 week uptrend comes in around 1.0110 to provide near-term support, but clearance of 1.0205 is still needed to pull USD bulls into the pair EURUSD GBPUSD USDJPY USDCHF 1.5100 1.6900 91.50 1.0360 1.5062 1.6840 90.05 1.0290 1.5046 1.6745 89.10 1.0200 1.4875 1.6550 88.95 1.0165 1.4810 1.6515 88.60 1.0034 1.4700 1.6460 88.00 1.0000 1.4626 1.6272 87.15 0.9890 S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.