Monday February 18, 2013 - 03:35:39 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 18-Feb-2013 -0333 GMT
Dow Jones (13981.76, +0.06%) ended slightly higher but still in the tight 13850-14050 range. It is tough to say which side the markets will break. Market remains closed today on account of Washington’s Birthday.
A-Pac is trading mostly in the green with Australia (5082.40, +0.55%), Hang Seng (23371, -0.31%) and the Taiwan (7955, +0.62%). Sentiment is positive in Asia after the G-20 seems to be supportive of weaker monitory policies.
Shanghai (2442.53, +0.99%) is also higher rising from its trend line on the daily charts. Markets have opened after a week long holiday. 2450 is a resistance on the 3-day charts a break of which will make it bullish for a further rise towards 2550 levels.
Nikkei (11422.95, +2.23%) is also higher following a weaker yen. G-20 members chose not to criticize the aggressive monitory policies of Japan which is being taken as a positive sign for further easing to take place. Index in the near term seems to be trading in the 11000-500 range.
Nifty (5887.40, -0.16%) closed below 5900 for the week. It looks be headed towards 5775-50 levels, immediate resistance is now seen near 5900-30.
Nymex Crude (95.63) retains its 95-98 sideways range and has come off towards the range Support. The broader trend is up for a target of 103-106 and the downside is expected to be limited to 93-90 if an immediate break below 95 is seen.
Brent Crude (117.79) has bounced back sharply from Friday's low of 116.28. The immediate outlook is not clear but the overall picture remains bullish for a rise to 121-122. A corrective dip to 115 cannot be ruled out before a rise to 121-122.
Gold (1617.70) fell sharply on Friday to test 1600. As we have been mentioning last week, there is a threat of seeing a fall to 1550-25 in the coming days. 1675 is an important Resistance to be watched on the upside which needs to be broken to ease the downside pressure.
Silver (30.11) has important Support near 29.50 which can be tested in the coming sessions. This Support near 29.50 needs to be watched as a break below it can drag it down to 27-26.
Copper (3.71) has come down towards its important Support at 3.70, a break below which can take it down to 3.50. Although 3.70 is a strong Support on the daily candles, the 3-Day and the Weekly line charts are looking more in favor for a fall to 3.50 as Copper is turning around from an important Resistance at 3.80. Take a look at the Resistance in Copper line chart in the following link:
Dollar-Yen (94.15) trades higher on relief the G20 did not castigate Japan for currency manipulation. A rise past 94.50 can target 95.50-96.00. The Euro (1.3340) is stable between 1.33-34 for the last couple of days. Long-term Support is available at 1.32 and the Euro might be bullish given that the Euro-Yen (125.60) can target 126.20.
The Pound (1.5485) looks particularly bearish given the break below 1.56 last week. There are fears of stagflation in the UK, with inflation expected to remain above 2% and growth expectecd to fall to 1%.
Dollar-Swiss (0.9240) could find some Resistance near current levels if the Euro starts rising again. Notice that the EURCHF (1.2325) could also have long-term Resistance near current levels.
The Aussie (1.0287) has fallen below the 200-day MA (1.0315) again. This fresh dips makes it bearish again, targeting 1.0250-30. There are concerns about slowing growth and that interest rates could fall.
After a benign G20, Japan could move towards QE to expand its balance sheet relative to the USA and Europe. The next BOJ Meeting is on 7th March.
The Spain 10-Yr (5.19%) has come down to an important Support. We need to see if this breaks or holds. At stake is either a rise towards 5.6% or a fall towards 5.0%.
The US 10-Yr (2.0%) could stabilise near current levels. The market may start debating whether the US recovery seen in 2012 will continue in 2013 or not. The US is closed today. The Housing Starts and Existing Home Sales on Wednesday and Thursday will be important. We have a suspicion there may be limits to how much growth/ recovery one can squeeze out of the Housing sector.
No major data release today.
EU Trade Bal
...Actual 11.70 Bln ...Previous 13.00 Bln
US TICS (Net foreign purch of long-term Sec)
...Actual 64.19 $ Bln ...Previous 52.38 $ Bln
US Industrial Production
...Actual - 0.10 % ...Previous 0.41 %
US Capacity Utilization
...Actual 79.10 % ...Previous 79.30 %
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