Thursday April 22, 2010 - 03:38:54 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 22-Apr-2010 - 0337 GMT
The US equities closed marginally higher yesterday. The Dow (11124.92) ended flat and the Nasdaq (2504.61) ended up 0.17%. The Dow is unable to break above the Resistance at 11100-200 from the past few days and we may see some correction towards 10500, if the current Resistance holds.
In Asia, Red is the colour of the day. The Nikkei (10881.66, down 1.88%) wiped out yesterday's 1.7% gain on stronger Yen and may find some Support near 10700-50 in the coming days. The Shanghai (3004.80) is down 0.94% and the Hang Seng (21362.32) is down 0.69%. In India, the Sensex (17472.56) was flat and the Nifty (5244.90) was up 0.28%, yesterday. The Sensex has a Support at 17300, a break below which may take it towards 16500 in the coming weeks.
In Australia, the All Ordinaries (4926.70) is down 1.08%.
Crude (83.27) is trading lower below 84. The EIA's data release yesterday which showed higher than expected increase in the US Crude inventories pulled down the price. As mentioned earlier, with Support in the broad 82-80 region, the overall picture looks bullish for a rise to 88-90 in the coming days/weeks.
Gold (1146) has risen from yesterday's low of 1138.10. As mentioned earlier we might look for a sideways move between 1120-60 for some time with a bullish bias.
Greece continues to weigh heavy on the Euro, which is trading lower near 1.3380. This issue is remarkable in that it has been able to stay in the headlines for the past several weeks. Most other "events" tend not to last more than a few days. Anyway, there should be Range Support near 1.3320 today. Dollar-Yen (92.83) has dipped a bit from yesterday's high near 93.44 in a bit of consolidation after the strong rise earlier in the week. Overall outlook appears bullish for re-test of 94.00.
The Pound (1.5415) is continuing to move up slowly after having bounced from the low of 1.5191 on Monday, but may find Resistance near 1.5490-5500 today. Dollar-Swiss (1.0700) has moved up a bit, continuing to mirror the Euro. Overall however, the Euro-Swiss cross (1.4325) has been coming down since Decemeber and remains in a downtrend. To that extent, upmoves in Dollar-Swiss are likely to be subdued. In other words, selling EUR-USD is better than buying USD-CHF. The Aussie (0.9255) has fallen back from yesterday's high near 0.9335 as it seems to be hesitating before breaking onto higher ground. However, expect Support near 0.9225-00 today.
Among the Asians, USD-SGD (1.3740) has bounced slightly from yesterday's low near 1.3695 but faces an important Resistance near 1.3765 today. Dollar-Won (1111.70) has also moved up slightly today, within an overall downtrend. Dollar-Rupee had closed at 44.55 yesterday bouncing from an intra-day low near 44.36. The overall sideways range of 44.20-80 should continue through today-tomorrow at least.
The 3M USD LIBOR was unchanged at 0.31%. The 2Y and 10Y yeilds were down 3bps and 5bps each to quote at 0.99% and 3.74% respectively.
The ascending triangle seen on the 10Y TBond/JGB Differential chart is nearing for a breakout which will have to be watched closely as it would very significant in determining the trend going forward. To see the 10Y TBond-JGB differentials graph click on the following link:
09:00 GMT EU EA (16) Curr Acct Bal Q4 '09
...Previous EUR 4.8 bln
09:00 GMT EU EA (16) Bal of Trade in services
...Previous EUR 10.2 bln
09:00 GMT EU EA (16) Curr Acct Bal as % of GDP
12:30 GMT US Mar Core PPI (MoM)
...Expected 0.1%...Previous 0.1%
12:30 GMT US Mar Core PPI (YoY)
14:00 GMT Mar US Existing Home Sales
...Expected 5.28 Mln...Previous 5.02 Mln
UK BOE Minutes
...Actual 0-0-9 hold...Previous 0-0-9 hold
...Actual 8.0%...Previous 7.8%
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