Friday May 21, 2010 - 03:42:00 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 21-May-2010 - 0340 GMT
The US Equities closed down yesterday. The Dow (10068.01) was down 3.60% and the Nasdaq (2204.01) was down 4.11%. The Markets were down on account of economic worries, as the Index of US Leading Economic Indicators declined in April, followed by an increase in the number of Jobles Benefits applicants in the US. On a break below 10000-9950, we may see some more fall towards 9500 on the Dow in the coming weeks.
The Asians are bleeding. The Nikkei (9778.65, down 2.51%) may find some Support near 9750 and the Shanghai (2532.08, down 0.93%) may fall further towards 2250 on a break below 2500, in the coming weeks. The Hang Seng (19545.83) is down 0.17%. In India, the Sensex (16519.68) was up 0.68% and the Nifty (4947.60) was up 0.57% yesterday. The Sensex may fall towards 15500 on a break below 16100 in the coming weeks.
In Australia, the All Ordinaries (4262.90, down 1.83%) may find some Support near 4250-300 in the coming weeks.
Crude (70.01) has bounced back sharply from its low of 68.85 and is trading near 70. However, with Support-turned-Resistances at 71.70-72 region and at 75, it is expected to remain pressured on the downside. This week's close will have to be watched carefully.
Gold (1173) is continuing to trade below 1200 and broke below the Support at 1180 mentioned earlier. While below 1180 we might see further downmove towards 1150 which is the next significant Support level seen. However, the broader picture continues to remain bullish and we might expect a bounce back from 1150 levels.
"SPECULATIONS" allover witnessed a sudden reversal on most of the currencies yesterday. Whether these speculations will reverse the stronger dollar? We will have to wait and watch.
The Euro (1.2577) has bounced back from its low of 1.2294 on speculation that EU will take further more steps to ease the debt crisis concerns. Resistance is seen at 1.2620, a strong break above which might see 1.27-2720 on the upside today. Dollar-Yen (90.24) has bounced back from its low of 88.95 after the Japan's Finance Minister said they are watching the currency market movements. It is now trading below the 200-DMA (currently at 91.10).Aussie (0.8235) also has bounced back from its low of 0.8071 on speculation that RBA would intervene. It has Resistance at 0.83 which might be tested today.
The Eur-Yen (113.35) Cross has risen sharply from the low of 109.45 following the rise in the Euro and Dollar-Yen. Cable (1.4382) is continuing to be ranged between 1.4220-1.4520 within the overall downtrend. Dollar-Swiss (1.1571) is continuing to trade strong and is keeping up its bullish sentiment intact for further rise to 1.17-18.
In Asia, the USD-KRW has risen sharply and is now trading near 1193. Might expect further rise to 1200. The USD-SGD is trading strong near 1.411. Dollar-Rupee has closed higher at 46.81/82 yesterday.
The 3M USD LIBOR was unchaged at 0.48%. The 2Y and 10Y were down 4 bps and 12 bps each to quote at 0.73% and 3.25% respectively.
05:00 GMT BOJ Meeting
...Expected 0.10%...Previous 0.10%
08:00 GMT Apr GER IFO Business Expectations
08:00 GMT Apr GER IFO Business Situations
08:00 GMT Apr GER IFO Business Climate
...Expected 101.9...Previous 101.6
11:00 GMT CA Core Inflation Index Y/Y
JP GDP Q4'10 (1st Pre)
...Actual 1.2%...Previous 1.0%
14:00 GMT Apr US Philifed Index
...Actual 21.9...Previous 20.2
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