Friday July 23, 2010 - 03:39:41 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing - 23-Jul-2010
The US Equities rallied after Caterpillar and UPS earnings beat forecasts for the Second quarter, yesterday. The Dow (10322.30.53) was up 1.99% and the S&P 500 (1093.67) was up 2.25%. The Dow may see some Resistance near 10500 in the coming days.
The Asian Equities are up following the US markets today. The Nikkei (9381.79) is up 1.75% and the Shanghai (2576.50) is up 0.55%. In India, the Sensex (18113.15) and the Nifty (5441.95) were up about 0.76% yesterday. We may see the Sensex touch 18350-400 in the coming days.
Crude (79.13) has risen sharply breaking above the Resistance at 78.50 and is now trading above 79. The threat of a tropical storm, stronger equities and weaker dollar triggered the sharp rise yesterday. A strong break above 80 might increase the chances of further rise towards 83 in the coming days. However, if 80 holds we might see a pull back once again towards 77-75.
Gold (1194.50) has been ranged between 1175-1200 over the last few days. As mentioned earlier 1175-70 is a very significant Support region which we expect to hold. However, a break below it might pull it further down towards 1150.
The market's much awaited Europe Bank stress test results are due today.
The Euro (1.2891) has come off from yesterday's high of 1.2933. With Resistance in 1.2950-70 region we expect it to retain its overall downside pressure and might be little volatile ahead of the stress test results. Dollar-Yen (86.84) is retaining its downside pressure and the Resistance in 87.30-50 region is continuing to hold. We might see a test of the Support in 86.15-00 region today. Euro-Yen Cross (111.92) has come off from yesterday's high of 112.74 and might see a dip once again towards 111-110 today.
The Pound (1.5276) is ranged between 1.5100-5350 over the last few days. The 21-MA (currently at 1.5173) is giving a good Support. But if th Resistance 1.5130 holds, then a break below the 21-DMA might trigger sharp downmove in the coming days. Dollar-Swiss (1.0433) is continuing to trade weak. A break below the significant Support at 1.0400 might pull it further down towards 1.0220-00. Aussie (0.8911) has risen sharply and trading strong. However the significant 200-DMA Resistance is at 0.8964 which might hold for some time.
In Asia, the Korean-Won has strengthened and is now trading near 1197. The USD-SGD is trading near 1.3728. Dollar-Rupee has closed lower yesterday at 47.12/13 and might test the Support in 47.00-46.90 region today.
The 3M USD LIBOR was down 1 bps to quote at 0.50%. The 2Y yield and the 10Y yield were up 1 bps and 6 bps to quote at 0.56% and 2.93% respectively.
08:00 GMT June GER IFO Business Expectations
...Expected 101.6...Previous 102.4
08:00 GMT June GER IFO Business Situations
...Expected 101.8...Previous 101.1
08:00 GMT June GER IFO Business Climate
...Expected 101.5...Previous 101.8
08:30 GMT UK GDP Q2 '10 (Pre)
...Expected 0.6%...Previous 0.3%
11:00 GMT CA Core Inflation Index Y/Y
...Expected 1.9%...Previous 1.8%
EU EA (16) Curr Acct Bal Q1 '10
...Actual -25.4 bln...Previous EUR -19.6 bln
EU EA (16) Bal of Trade in services
...Actual 3.3 bln...Previous EUR 4.9 bln
EU EA (16) Curr Acct Bal as % of GDP
...Actual -1.1%...Previous -0.9%
June US Existing Home Sales
...Actual 5.37 Mln...Previous 5.66 Mln
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