Tuesday June 8, 2010 - 03:31:00 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Jun-2010 - 0328 GMT
Further weakness in the Dow, which has closed at 9816.49, down 115.48 (1.16%). Surprisingly, most Asian indices, barring New Zealand and Taiwan, are trading in the green, ranging between +0.13% (Hong Kong) to +0.96% (Australia). The Nikkei is up 0.37%, trading near 9556.27.
While the near term trend remains weak for Equities globally, there is an important Support near 9460 for the Dow. This may hold for a while and even produce a bounce. Take a look at
The Sensex and Nifty had closed at 16781.07 and 5034.00 respectively yesterday. They may be stable today if Asia holds up. Longer term, there is Support at 16000 on the Sensex and near 4900-800 on the Nifty.
Crude (71.55), though has bounced back from yesterday's low of 69.51, failed to see a strong break above the Resistance at 72 and has come off from the high of 72.49. The expectations that the US Crude inventories will see further drop this week supported the price rise. A strong break above 72 might take it further up towards 76, which is a crucial Resistance level to watch for on the upside.
Gold (1237.50) is continuing to trade strong and has broken above 1230. The overall bullish sentiment is intact and we might expect a test of the previous high of 1249.70 (14-May-10) in the coming days and a strong break above 1250 might trigger further rise towards 1270. To see the Gold graph click on the following link:
The Euro (1.1960) had rallied to 1.1990 and is stabilising just now. With Support at 1.1885 (200-month MA), further rally towards 1.2020 might be possible. Dollar-Yen (91.72) is likely to trade narrowly between 91.50-92.00 for the greater part of the day today. Overall also, a range of 90.50-92.50 is likely to prevail for the next few days. This might give some respite to the Aussie (0.8178) which has a double-bottom on the 1-hour chart, and might rally towards 0.8250.
Dollar-Swiss (1.1613) has been very choppy lately, trading in a volatile sideways range of 1.1731 on the upside and 1.1417 on the downside for about a week (two in fact) now. Long-term Resistance near 1.1760 should be kept in mind. The Pound (1.4488) has near term Support at 1.44 and shows signs of rallying towards 1.45. It may stabilise thereafter.
In Asia, the Korean Won remains weak, trading near 1234.80. Further weakness is more likely than not. USD-SGD trades near 1.4150 and can weaken towards 1.43 in the coming days. Dollar-Rupee had closed near 47.09 yesterday and might be worth buying on a dip to 46.80.
The 3M USD LIBOR was unchaged at 0.54%. The 2Y and 10Y were slightly up by 3 bps and 1 bps each to quote at 0.74% and 3.18% respectively.
The Fed Chairman, Bernanke has said yesterday that the Fed will raise interest rate from its record low levels before the US economy attains full employment or the inflation surges.
The BOE and ECB meetings on interest rate decisions are scheduled for this week on Thursday (10-Jun-10).
No major data release today
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