Thursday March 25, 2010 - 03:50:10 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Mar-2010 - 0336 GMT
The US Markets were down on account of increased worries over the fate of the Euro with Fitch's downgrade of Portugal adding to the doubts yesterday. The Dow (10836.15, down 0.48%) is still above the immediate trendline Resistance on the daily charts and we see it rising towards 11000-100 over this week and the next week. The Nasdaq (2398.76) was down 0.68% and has a Resistance near 2500 in the coming weeks.
The Asian Equities are mixed today. The Nikkei (10826.02) is up 0.1%, the Shanghai (3029.199) is down 0.9% and the HangSeng (20728.36) is down 1.33%. The Nikkei has a Reistance at 11000 on the daily charts, a break above which may take it towards the Resistance level of 11250 (on the weekly charts) in the coming weeks. India was closed yesterday. The Sensex has been moving sideways for some days after nearing 17500 and we need to wait and watch if this Resistance is strongly broken in the coming days. To see the Nikkei candles, follow the link below:
Crude (80.41) fell below 81 following the EIA's data release that showed 7.3 million barrels increase in US Crude inventories against the expected increase of 1.7 million barrels. Immediate Support is seen at 80, a strong break below which might see 78-77.50 on the downside. Note Crude is continuing to trade above 80 for more than two weeks. Remember Crude has been ranged between 68-84 over the last few months.
Gold (1089.20) has broken below 1100 confirming the Head and Shoulder pattern mentioned earlier. Though Support is seen at 1080, we might expect it to retain the downside pressure for further fall to 1050-30 in the coming days as the dollar is also continuing to trade strong. To see the Gold graph click on the following link:
Stellar gains for the Dollar yesterday and today, even market favourites like the Aussie. The Euro (1.3324) saw a low near 1.3304. Dollar-Yen (91.85) rose to a high near 92.40 and is trading well above the 200-day Moving Average at 91.55. The Aussie (0.9112) fell to a low near 0.9067 in the US session but has recovered from there.
The Dollar gained yesterday on further worries about Greece making it through the crisis. Joining the Greek were the Portuguese. The Euro is looking week, targeting 1.32, maybe even1.31. The Pound fell (1.4892) to a low near 71.4855 yesterday and could take on additional weakness. Dollar-Swiss (1.0714) has risen in the overall Dollar strength even though the Swiss Franc has strengthened to record levels vis-a-vis the Euro.
In Asia, Dollar-Won trades higher near 1139.30 while USD-SGD has moved up quite well to 1.4065 today, in line with our expectations. Dollar-Rupee had closed at 45.5950 on Monday. The onshore market was closed yesterday, but the NDFs are trading higher near 45.71/76. We see good chances of Dollar-Rupee moving up towards 45.80 today.
3M USD LIBOR was set at 0.28%. Yields on US Treasuries grew sharply yesterday. The 2Y and 10Y yields were up 5 and 14 bps to quote at 1.08% and 3.83% respectively. The yields are now quoting near the year highs despite experts' worries that the pace of economic recovery does not call for such high levels of Treasury yields. The yields are moving higher on high US sovereign risk and as the US faces threat of losing the AAA rating.
No major data release today.
Feb GER IFO Business Expectations
...Actual 101.9...Previous 100.9
Feb GER IFO Business Situations
...Actual 94.4...Previous 89.8
Feb GER IFO Business Climate
...Actual 98.1...Previous 95.2
Feb US Durable Goods Orders
...Actual 0.5%...Previous 3.9%
US New Home Sales
...Actual 308K...Previous 315K
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