Monday September 21, 2009 - 03:32:29 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 21-Sep-2009 - 0330 GMT
The Dow (9820.20) and the Nasdaq (2132.86) rose last week by more than 2% each led by positive signs of economic recovery suggested by a host of data releases last week. The Dow has Resistance near current levels at 9870 for this week. Significant events/ releases out of US this week are: FOMC Meeting (23 Sep), US Durable Goods (25 Sep), Home Sales.
In Asia, the Nikkei (10370.54) and the Sensex (16741.30) are closed today. The rest of the Asian indices are trading lower. The Shanghai (2876.53) is down 2.91%. The Resistance near 3050 in Shanghai has pushed the index down after it spiked above the Resistance to record a high of 3068 last week. The Sensex has Resistance near 17000 for the week. A rise past would be very bullish.
Crude (72.31) is continuing to trade above 72. With no major economic news today and tomorrow, we might expect Crude to be ranged and hold above 70 until the Federal Reserve's interest rate decision which is due on Wednesday (23-Sep). On the upside significant Resistance is seen in the region 74.00-50.
Gold (1004.40) is trading lower. If it continues to trade lower, a break below 1000 might pull it down towards 990 where some Support is seen. On the upside Resistance is seen at 1030.
Some profit-taking seems to be coming in on the Euro (1.4690) and the Aussie (0.8655) both of which are trading lower than the highs of 1.4770 and 0.8778 respectively, seen last Thursday. This is despite the rise/ stabilisation in Dollar-Yen, which is trading near 91.50, comfortably above the crucial level of 90.00. The Pound (1.6235) continues to be battered however, trading just below a crucial level at 1.6265. Dollar-Swiss (1.0310) is a mirror image of EUR-USD and has rallied slightly from Thursday's low near 1.0275.
Although there is profit-taking today, which can extend further during the week, the overall big picture trend remains Dollar negative. While there can be "sell" opportunities in the non-Dollar currencies this week, they may be bought on dips for the medium to long term.
Japan is on holiday today (and tomorrow), so that is also keeping the market quiet. The Rupee market is also closed today on account of Id.
3M USD LIBOR has remained unchanged at 0.29%. The Treasury yields have risen. The 10Y yields have gone up 9 bps and is approaching 3.50% mark once again. While the Support at 4.10% on the 30Y bonds look likely to be honoured, the chances of double top on 10Y yields are not allayed. To see the chart of US Yields, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00
DATA THIS WEEK
Important data this week is the FOMC meeting on Wednesday, the German IFO on Thursday and US Durable Goods and New Home Sales on Friday. For a detailed Calendar, please click on
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