Wednesday September 1, 2010 - 03:45:35 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Sep-2010 - 0340GMT
The US Equities lost early gains to end flat yesterday. The markets were up over favourable consumer confidence data but lost grounds after release of minutes of the Fed's Aug 10 meeting. The Dow (10014.72) and the S&P 500 (1049.33) closed flat. The Dow has again closed above the strong and important Support at 10000 and it needs to be seen whether this Support is honoured (preferred) or broken in the coming sessions.
The Asians are trading higher today. The Nikkei (8869.74) is up 0.52% and the Shanghai (2659.85) is up 0.80%. In Australia, the All Ordinaries (4515.00) is up 1.72% on better than expected GDP numbers. In India, the Sensex (17971.12, down 0.34%) and the Nifty (5402.40, down 0.24%) fell heavily on weak global sentiments but recovered some losses after the release of Indian GDP figures yesterday. We may now see the markets fall towards the Support at 17500 and 5300 on the Sensex and the Nifty respectively.
Crude (71.79) fell sharply yesterday from the high of 74.73 and is now trading below 72. Although immediate Trendline Support is seen at 71.60, and the next Support at 70, the broader picture is looking bearish for a break below 70. However, we will have to wait and watch the market and as Crude is following the equity markets, the US NFP data release due this Friday (03-Sep-10) will be very significant in detemining the further direction of move. The US Crude inventory data is due today. To see the Trendline Support on the Crude graph click on the following link:
Gold (1248) has risen sharply yesterday and is now trading near its crucial Resistance at 1250. A strong break above 1250 might see further rise towards 1275 in the coming days. Also a weekly close above 1250 would open doors for a fresh upmove towards 1300 or even higher. To see the Gold graph click on the following link:
Consolidative phase in the currency market at the moment, with the USD Index trading in a relatively narrow range of 82.60 and 83.60. This is as per expectations at the beginning of the week, when we suggested action might be concentrated in Asia. To be noted, though, is that there is mild Dollar-bullishness within the consolidation.
The Euro (1.2686) is trading a little indecisively, but has a bearish bias while it remains below 1.2780-2800. Dollar-Yen (84.45) had fallen to a low of 83.82 yesterday, but has recovered a bit from there. The 83.80-60 region is likely to be an important Support now for a couple of days. The bigger trend remains bearish, though. The Euro-Yen Cross (107.18) has shot up today, after seeing a low near 106.17 yesterday. A rise past 107.50 can take the Cross up towards 108.25.
Dollar-Swiss (1.0165) is continuing to push down, targeting trendline Support on the Weekly Candles at 1.0035 by next week. A low near 1.0136 had been seen in the late US session yesterday. The Pound (1.5375) saw a sharp fall again yesterday to again close below the 200-day MA at 1.5440. Looking bearish enough to test intra-day/ intra-week Support at 1.5275.
The Aussie (0.8996) has been seeing some wild up-down moves over the last three days, reflecting the yo-yoing happening in Dollar-Yen. It fell from a high near 0.9026 (Monday) to a low near 0.8860 (yesterday) before back up today.
Among the Asians, the Korean Won is a little stronger today (near 1190), within an overall weakening trend. USD-SGD (1.3535) is just about managing to keep its head above water, consolidating between 1.3677 and 1.3455 over the last several days. Dollar-Rupee had closed at 47.06 yesterday and might trade a range of 46.90-47.20 today. Or the range could be narrow if there is lesser participation on account of Janmashtami.
The 3M USD LIBOR was unchanged at 0.30%. The 2Y yields and 10Y yields were down 1 bps and 3 bps to quote at 0.48% and 2.50% respectively.
00:30 GMT AU GDP QoQ (June'10)
...Expected 0.9%...Previous 0.5%
12:15 GMT US ADP Emp
...Expected 20K...Previous 42K
14:00 GMT Aug US Manufacturing ISM
...Expected 53.3...Previous 55.5
...Actual 8.8%...Previous 8.6%
...Actual 10.0%...Previous 10.0%
...Actual 0.2%...Previous 0.1%
US Case Schiller
...Actual 4.2%...Previous 4.6%
US Cons Conf
...Actual 53.5...Previous 51
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