Wednesday July 14, 2010 - 03:41:33 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 14-Jul-2010 - 0338 GMT
The US Equities rallied yesterday over strong earnings reported by companies for the second quarter. The Intel Corp posted its best quarterly figures for the April-June period in its 42-year history, followed by good numbers from Aluminium major Alcoa Inc and railroad operator CSX Corp. The Dow (10363.02, up 1.44%) posted its sixth consecutive daily gain and the S&P 500 (1095.34) was up 1.54%. The Dow may move up towards 10500 in the coming days.
Greenery in Asia today . The Nikkei (9807.36, up 2.83%) may go up to 10000 in the coming days while the Shanghai (2483.58, up 1.36) may find it difficult to rise past 2500-50 immediately. In India, the Sensex (17985.90) was up 0.27% and the Nifty (5400.65) was up about 0.33% yesterday. The Sensex may move up towards 18200-50 in the coming days.
Crude (77.24) has risen sharply breaking once again above 76 and is now trading above 77. Strong equity markets and weaker dollar trigger the sharp rise yesterday. Immediate Resistance is seen at 77.50 and a strong break above it might see further rise towards 79-80 in the coming days.
Gold (1211.40) has bounced back once again above 1200. Gold has been ranged between 1185-1220 over the last few days within the overall uptrend. A breakout on either side of this range would determine the further direction of
Weakness in the dollar seen all over. The Euro (1.2720) has risen sharply. It has very significant Resistance in the 1.2735-65 region, which if broken might see further rise 1.2800-50. Dollar-Yen (88.87) has bounced back from yesterday's low of 88.03 and might rise towards 89.20-50 today. Euro-Yen Cross (113.18) has risen sharply following the in the Euro and Dollar-Yen. A strong break above the immediate Resistance at 113.50 might increase the chances of further rise to 114.50-115.
The Pound (1.5210) has risen following the data release that showed a higher than expected increase in the inflation that has left speculation that BOE would rise the interest rates. While above 1.5200 there are good chances of further rise towards 1.5300-30 today. Dollar-Swiss (1.0560) has come off from yesterday's high of 1.0646 mirroring the rise in the Euro. Significant Resistance-turned-Support is seen at 1.0512 which might be tested today. Aussie (0.8827) has risen breaking above 0.8800 and might test the 21-Week-MA Resistance (0.8874) today.
In Asia, the Korean-Won is trading near 1212. The Sing dollar has strengthened following the strong GDP data release. USD-SGD is trading near 1.3749. Dollar-Rupee has closed at 46.77/78 and might test the Support region 46.60-40 today following the overall weakness in the dollar.
The 3M USD LIBOR was uunchanged at 0.53%. The 2Y and 10Y yields were up 3 bps and 7 bps each to quote at 0.66% and 3.12% respectively.
08:30 GMT UK Unemp
...Expected 7.9%...Previous 7.9%
09:00 GMT EU June CPI (YoY)
...Expected 0.9%...Previous 0.8%
09:00 GMT EU June IND Prodn (MoM)
...Expected 1.2%...Previous 0.8%
12:30 GMT US June Retail Sales
...Expected -0.1%...Previous -1.2%
June UK CPI Y/Y
...Actual 3.2%...Previous 3.4%
US June Trade Balance
...Actual $ -42.3 Bln...Previous $ -40.3 Bln
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