Tuesday July 27, 2010 - 03:48:23 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 27-Jul-2010 - 0341 GMT
The US Equities were up on account of favourable Economic Data release followed by an upward revision of the forecasted profit figures by FedEx, yesterday. The Dow (10525.43) was up 0.97% while the S&P 500 (1115.01) was up 1.12%. The Dow is near very important Resistance at current levels (100 DMA at 10526.78) and a break above this may take it towards 10800 in the coming days. However, please note that the Dow has moved up about 7.7% this month and it may now come off a little towards 10350-00 before rising towards 10800 in the coming days/weeks.
The Asian Equities are mixed today. The Nikkei (9516.43, up 0.13%) may go up to 10000 in the coming days and the Shanghai (2578.35, down 0.40%) may rise past 2600-50 in next few days/weeks. In india, the Sensex (18020.05) and the Nifty (5418.60) closed down about 0.60% yesterday and they might test their respective Resistance 18500 and 5500 in the coming days.
Crude (78.92) is cotinuing to trade higher. The strong US equity markets, weaker dollar are supporting the commodity price. However, as mentioned earlier, 80 is a very significant Resistance level to watch for and a break above it might trigger further upmove towards 83-85 in the coming days.
Gold (1183.80) is continuing to trade below 1200. As mentioned earlier 1175 is a very crucial Support level to watch for and a break below it might pull it further down towards 1150-40 in the coming days. To see the Gold graph click on the following link:
The Gold/Crude ratio (currently at 15.00) is near the significant Channel Support at 14.80. If this Support holds, there are good chances of the Resistance at 80 on Crude holding in the coming days. To see the Gold/Crude ratio click on the following link:
Bad day for the Dollar, which has weakened across the board. Continued rise in the Euro (1.3012) yesterday, and chances of further rise towards 1.3140-3200 now. With Dow closing above 10500 yesterday, risk-taking seems to be back in the air. Dollar-Yen (86.92) traded below 87.50 yesterday and might dip further towards 86.50 today. The Euro-Yen Cross (113.10) has risen on the back of a stronger Euro. A confirmed rise past 113.50 would be very bullish. This needs to be watched today.
The Pound (1.5500) is still looking bullish and might test the 200-day MA at 1.5555. Dollar-Swiss (1.0490) is trading quiet, just below 1.05. It may find buyers on intra-day dips towards 1.0450 as it looks ranged between 1.04-06 for a few days. In the meanwhile, the Aussie (0.9018) has powered past the 200-day MA (0.8961) yesterday and could well rise further towards 0.9120 over today-tomorrow.
Asian currencies have strengthened further since yesterday. Dollar-Won (1182.60) trades lower, compared to 1195.50 yesterday and so does USD-SGD (1.3612) compared with 1.3650 yesterday. Dollar-Rupee (47.04) had bucked the trend yesterday, rising instead of falling. Higher royalty payments by Maruti to its parent Suzuki may be seen as a trigger/ justification. A test of 47.10 might be seen today.
The 3M USD LIBOR was unchanged at 0.49%. The 2Y and 10Y yields were flat to quote at 0.59% and 2.99%.
In India, the RBI's interest rate decision in due today.
05:30 GMT RBI Repo Rate
05:30 GMT RBI Reverse Repo Rate
05:30 GMT RBI CRR
13:00 GMT US Case Schiller
...Expected 3.8%...Previous 3.8%
14:00 GMT US Cons Conf
...Expected 51.5...Previous 52.9
...Actual 0.3%...Previous 1.0%
June US New Home Sales
...Actual 330 K...Previous 267K
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