Monday August 2, 2010 - 03:41:42 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 02-Aug-2010 - 0338 GMT
The US Equities were silent last week. Poor economic data releases on the downside and upbeat corporate numbers on the upside kept the markets neutral. The Dow (10465.94) was up 0.39% and the S&P 500 (1101.60) was flat. The Dow is at a very important Resistance region near 10500-25, and we need to wait and watch of it honours it or breaks above it in the coming days.
Asians are trading strong today. The Nikkei (9655.79) is up 1.24% over strong corporate earnings and the Shanghai (2656.95) is up 0.74% despite slow rate of growth in the Chinese manufacturing activity in 17 months. In India, the The Sensex (17868.29) and the Nifty (5367.60) closed down about 1.50% last week. We need to wait and watch if the markets break the Resistance at 18350-500 or go down to touch the Support at 17500 this week.
Crude (79.34) has bounced back sharply from Friday's low of 76.45 and is now trading above 79. The weaker dollar and month end trading supported the price rise. Technically the Support at 76 is holding very well and is keeping up the chances of a break and rise above 80 towards 82-83 in the coming days. To see the Crude graph click on the following link:
Gold (1182.40) has bounced back from Friday's low of 1165.80. However, while below 1200 it is expected to remain pressured on the downside. 1175 is the immediate Support seen and 1150-40 is the next significant Support region to watch for below 1175. To see the Gold graph click on the following link:
The Euro (1.3082) is continuing to trade above 1.30. It has very important Resistance in 1.3100-25 region a break above which might take it further up towards 1.3200-50. Support is seen in 1.3000-2970 region. Dollar-Yen (86.56), though has bounced back from Friday's low of 85.94, is expected to retain the overall downside pressure with significant Resistance in the broad 87.00-50 region. Euro-Yen Cross (113.20) has bounced back from Friday's low of 112.02. Immediate Resistance is seen at 113.50 and a break above it might take it up towards 114.50-115. On the dowside 112-111 is the broad Support region to watch for.
Dollar-Swiss has honoured the important Support at 1.0400 last week and we see good chanCes of an upmove towards 1.0500-50 in the comiong sessions today. Aussie (0.9090) may go up to touch 0.9150-70 today. While below 1.5750, Cable may fall below 1.5700 today.
The Asian Currencies are trading strong. The Korean-Won is trading strong near 1172 following the strong industrial output data release. The USD-SGD has broken below its important Support at 1.3600 and is now trading much lower near 1.3545. Dollar-Rupee has closed lower at 46.40/41 on Friday and might see further dip today following the other Asian currencies.
The 3M USD LIBOR was down 2 bps to be set at 0.45%. The 2Y and 10Y yields were down 2 bps and 6 bps each to quote at 0.55% and 2.92% respectively.
14:00 GMT July US Manufacturing ISM
...Expected 54.3...Previous 56.2
...Actual 5.3%...Previous 5.2%
...Actual 10.0%...Previous 10.0%
US GDP Q2 '10 (Adv)
...Actual 2.4%...Previous 3.7%
...Actual 0.1%...Previous 0.0%
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