Tuesday February 19, 2013 - 03:38:10 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 19-Feb-2013 -0335 GMT
Dow Jones (13981.76, +0.06%) was closed yesterday. It is trading in the tight 13850-14050 range.
A-Pac is trading mixed with Australia (5093.60, +0.21%), Hang Seng (23348, -0.15%) and Taiwan (7960, +0.21%).
Shanghai (2399.46, -0.91%) closed lower yesterday as it faced trend line resistance near 2450 on the weekly Candle charts. A close below 2400-2390 will increase the chances of it seeing a corrective fall towards 2350-2300.
Nikkei (11395.16, -0.11%) is slightly lower today after having a strong day yesterday. It still continues to trade in the 11000-500 range. The range is likely to break on the upside. 12000 is a good target for the index.
Nifty (5898.20, +0.18%) ended slightly higher but is looking weak and can slide further lower towards 5750 in the coming days. Volatility seems to be increasing in the markets.
Nymex Crude (95.69) is flat near the lower end of its 95-98 range. The bigger picture remains bullish for a rise to 103-106 and the downside is expected to be limited to 93-90 if a break below 95 is seen before a rise.
Brent (117.49) is not gaining momentum to rise past 118 and looks mixed for the near term. Although the upside is open for a test of 121-122, the chances of seeing 115 on the downside first before a rise cannot be ruled out.
Gold (1614) is holding above 1600. With good Resistance in 1650-75 region, our bias is bearish for a break and fall below 1600 towards 1550-25.
Silver (30.10) is bouncing from just above its important Support at 29.50. Failure to gain momentum and rise further from here will increase the chances of seeing a break and fall below 29.50 towards 27 in the coming days. We will have to wait and see.
Copper (3.68) has dipped below its important 3.70 Support level and can now fall to 3.50 while it remains below 3.70.
Currencies were largely quiet yesterday given the US holiday. The Dollar Index (80.62) has Resistancess overhead at 80.67 and at 81.20. Whether these will hold or break will determine if the Index can break out of its multi-week sideways range between 79-81 or not.
The Euro (1.3345) seems to be firming Support at 1.3300-3280. Need to watch that today. The Pound (1.5465) remains bearish with Resistance at 1.5500-25. The market perception is that the BOE (minutes to be released tomorrow) could be tacitly favouring a weaker Pound.
Dollar-Yen (93.80) has failed to rise past Resistance at 94.25-45 and could thus be vulnerable to a dip towards 92.50. The Euro-Yen Cross (125.15) looks ranged with a bearish bias and chances of testing 124.10 in the near term before a medium term upmove.
Dollar-Swiss (0.9240) has managed to remain above 0.9225-10 so far. It is poised for a decisive move today, either a rise past 0.9260 or a fall below 0.9225-10. The Aussie (1.0318) saw a low near 1.0275 yesterday, but did not see follow-through selling. Still, it looks vulnerable to further weakness while below 1.0385, the crucial Resistance on the upside.
The Spain 10-Yr (5.25%) has bounced from the 5.19% Support seen yesterday. As such, there could be danger of seeing a test of 5.40% if not 5.60. That could drag the Spain-Germany 10-Yr (3.60%) higher towards 3.70%, pushing the Euro lower.
The German 2-Yr (0.18%) remains comfortably above 0.0% but the Germany-USD 2-Yr Spread (-0.09%) remains subdued, having come down from levels just above 0.0% earlier in January. A fresh rise towards 0.0% would be good for the Euro.
The US 10-Yr (2.02%) has risen above 2.0% again, which is good. We see higher yields in the coming weeks and the Housing data over the next couple of days is going to be crucial.
No major data release today.
No major data release yesterday.
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