Friday September 17, 2010 - 03:38:52 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-Sep-2010 - 0336 GMT
The Dow (10594.83) climbed further yesterday, after breaking near term resistance at 10500 earlier this week. A test of 10800 looks likely now. That's another 1.94% from current levels. Sentiment is strong at this point of time. Asian indices are also all in the green, with gains ranging from 0.07% (Malaysia) to 0.75% (Japan). Only the Shanghai is down 0.11%, which is neither here nor there.
It is to be noted, though, that the Shanghai has fallen through this week, even as other Indices have done well. Especially, there is a stark contrast against the Nikkei. Take a look at
The Sensex (19417.49) and Nifty (5828.70) had both closed a little lower yesterday. It is to be seen how they fare today. Both look overbought.
Crude (74.57) continued with its downmove and closed lower for the third consecutive day as the supply concerns eased following the news that Enbrige would resume operation from Friday. Support is seen at 74 a break below which might pull it further down towards 72. However, if 74 holds we might see a bounce back once again towards 78 next week. To see the Crude graph click on the following link:
Gold (1274.10) is continuing to trade strong. The economic recovery concerns is keeping the price higher. A close above 1280 today would add further strength to take it further up towards 1320-50 in the coming days. However, profit taking at 1280, if seen might see a slight correction towards 1250. To see the Gold graph click on the following link:
The Euro (1.3090) rose further yesterday, seeing a high of 1.3116. The Dollar Index (81.29) has a crucial Support near 81.00 now and the Dollar is clearly on the defensive. Dollar-Yen (85.75) managed to eke out further gains yesterday and has risen past a crucial resistance at 85.50. Support is seen at 85.30 now. It needs to build on the gains to avoid fresh losses.
Dollar-Swiss (1.0168) rose well yesterday, reducing chances of a fresh fall below 1.0000. It has an immediate and important intra-day Resistance at 1.0185 today. If that breaks, however, we could be looking at a strong rise for the Dollar. The Pound (1.5644) continues to trade well above 1.5550-5600 and is looking strong enough for a further rise towards 1.5775. The EUR-GBP is looking good on the Weekly charts, so the Pound should be strong going forward.
The Aussie (0.9410) has risen well from yesterday's Support near 0.9330 and can move up to test Resistance near 0.9525. In Asia, the Sing Dollar (1.3355) has strengthened again. The Korean Won (1162.50) continues to vacillate near the 200-day MA at 1164.30. The Chinese Yuan (6.7145) has strengthened even further today.
The Brazilian Real (1.7175), on the other hand, has weakened a bit earlier this week.
Dollar-Rupee (46.1450) had closed on its 200-day MA yesterday. It is to be seen whether that holds or breaks today.
The 3M USD LIBOR was unchanged at 0.29%. The 2Y yield was down 2 bps to quote at 0.47% while the 10Y yield was up 6 bps to quote at 2.76%.
Yesterday, the SNB left the rates unchanged at 0.25%. RBI raised the Repo and Reverse Repo rates yesterday.
12:30 GMT US May Core CPI (MoM)
...Expected 0.1%...Previous 0.1%
...Actual 0.25%...Previous 0.25%
RBI Repo Rate
...Actual 6.00%...Previous 5.75%
RBI Reverse Repo Rate
...Actual 5.00%...Previous 4.50%
...Actual 6.00%...Previous 6.00%
EU Trade Bal
...Actual -0.2 Bln...Previous -1.6 Bln
July US Philifed Index
...Actual -0.7...Previous -7.7
US July Core PPI (MoM)
...Actual 0.1%...Previous 0.3%
US July Core PPI (YoY)
...Actual 1.3%...Previous 1.5%
12:30 GMT US Current Account Balance
...Expected $ -124 Bln...Previous $ -109 Bln
US June TICS (Net foreign purch of long-term Sec)
...Actual $ 61.2 Bln...Previous $ 44.4 Bln
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