Thursday September 24, 2009 - 03:48:47 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 24-Sep-2009 - 0346 GMT
The Dow (9748.55) and the Nasdaq (2131.42) fell yesterday in the late hours as the Resistance at 9900 on the Dow was tested earlier and held. To see the Trendline Resistance, click on: http://www.kshitij.com/graphgallery/djiacandle.shtml#candle
The Asian indices are trading lower except for the Nikkei (which is up 1.72%). The Nikkei has opened after a gap of 5 days. The Hang Seng (21143.59) is trading lower by 2% and the Shanghai (2831.65) by 0.5%. The Shanghai has dipped quite a bit since the beginning of this week after bowing to the Resistance at 3050. The Sensex (16719.50) has dipped yesterday 167 points after the Resistance at 17000 continued to provide Resistance for this week. To see the Resistance at 17000 on the weekly candles, click on: http://www.kshitij.com/graphgallery/sensexcandle.shtml#candle
Crude (68.57) fell sharply following the US Energy Information Administration's (EIA) data that showed an unexpected increase of 2.8 million barrels against the expected decrease of 1.5 million barrels in US Crude inventories. The significant Trendline Support at 69.50 is also broken and if Crude continues to trade lower we might see it moving down towards 67-65 in the coming days. To see the Trendline on the Crude graph click on the following link:
Gold (1010.30) is continuing to be ranged between 1000 and 1020 for some time. As mentioned earlier 1030 is the significant Resistance to be watched for on the upside. We might expect the range to continue for some time.
Attribute it to the FOMC or to the general chart structure, but there has been some welcome profit-taking in most of the non-Dollar currencies. The Euro (1.4725) dipped to 1.4685 in early Asian trade; the Aussie (0.8697) is up a bit after having dipped to 0.8645. Dollar-Yen (91.21) suggests that overall sentiment may still be Dollar-bearish as it is trading a little lower after having rallied to 91.65 in early Asian trade. Note that the Euro-Yen Cross trades near 134.20 and could pose a danger of falling towards 132.50 over the next few days. If so, the Euro might have a danger of seeing deeper correction towards 1.4600-4570. The German IFO is an important data release today.
Dollar-Swiss (1.0275) is up from yesterday's low near 1.0190 but is a tad lower than today morning's high near 1.0305. It has an important Resistance at 1.0335. The Pound (1.6345) has been quiet and may trade sideways between 1.62-66 for a couple of days.
Slight profit-taking is being seen in the Asians as well, within an overall downtrend. USD-KRW is "up" near 1197 after having seen a low near 1190 yesterday. The Sing Dollar has weakened to 1.4165 from yesterday's level of 1.4075. As a consequence (also of the relative dip/ fall in Equities), Dollar-Rupee might move up towards 48.15-25 today after having closed at 47.9950 yesterday.
3M USD LIBOR was set 1 bp lower at 0.28%. The 3M USD LIBOR has almost converged with the 1M LIBOR. As the LIBOR across different time periods converge, we might see it starting to rise once again. But that is some more time ahead. To see the chart of USD LIBOR, click on: http://www.kshitij.com/graphgallery/usdlib.shtml#usd
The FED has kept the interest rates unchanged yesterday at 0.00-0.25% to allow time for the economy to recover. However, the fears over withdrawl of economic stimulus still lurks. The assurance from the FED, that the economy is on the recovery path, saw the yields on US Treasuries declining. The 10Y yields fell 3 bps and is quoting at 3.41% while the 2Y yields fell 5 bps to quote at 0.96%.
14:00 GMT July US Existing Home Sales
...Expected 5.36M...Previous 5.24M
08:00 GMT Aug GER IFO Business Expectations
08:00 GMT Aug GER IFO Business Situations
08:00 GMT Aug GER IFO Business Climate
...Expected 92.1...Previous 90.5
UK BOE Minutes
...Actual 0-0-9 hold...Previous 0-0-9 hold
US FOMC Interest Rate
...Actual <0.25%...Previous <0.25
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