Tuesday March 19, 2013 - 03:36:59 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 19-Mar-2013 -0334 GMT
Dow (14452.06, -62.05, -0.43%) down slightly, not much, as reaction to the Cyprus development. Still, profit-taking can continue for some more days. Dip towards 14250 possible.
Asia-Pac is in the green today, not continuing yesterday's decline. The Nikkei (12467.18, +246) has recovered yesterday's losses. The Shanghai (2244.12, +0.18%) is quiet and might find Support near current levels on the 21-week MA.
The Nifty (5835.25) had closed lower yesterday. It might be quiet before the RBI interest rate announcement today and may take a cue from there. On the charts, the chances of a fall towards 5750-5700 cannot be ruled out. Such a dip, if seen, would provide a very good buying opportunity, though.
The Euro (1.2957) is managing to remain above 1.2900, having found Support above the 200-day MA (1.2874) yesterday. Seems a little encouraging for the Euro. But, the outlook is unclear in the near term and the Euro is likely to be quiet between 1.29-30 through today.
Dollar-Yen (95.68) has seen a sharp recovery from yesterday's low near 94.31. Looks bullish for 96.50+ now, if it can break past immediate Resistance at 95.88. The Euro-Yen Cross (124) looks very bullish on the Weekly Candles, with chances of 126.80 by next week.
The Pound (1.5103) has come off from Friday's high near 1.5177. But, if it manages to consolidate here for a while, it might be able to move up towards 1.5200-50. Dollar-Swiss (0.9464) appears totally mixed with equal chances of a rise towards 0.9550 or fall towards 0.9400. The Aussie (1.0385) rose to 1.0410 yesterday and seems to be gearing up for a rise towards 1.05.
Dollar-Rupee (54.17) came off from yesterday's high near 54.34. It might dip towards 54.05-00 today, given the relative stability in the Euro.
The market waits for the RBI's decision today. A rate cut is more or less fully priced in. What indications Subba Rao gives about the future will be important.
The US FOMC Meeting is due tomorrow. The market will look for assurance of continued liquidity even though last week's Industrial Production and Capacity Utilisation werre much better than expected.
The US 10-Yr (1.97%) has fallen back below 2.0%. It needs to move up sharply from near current levels in order to avoid the danger of a fall towards 1.75%, which will be bad for most markets.
5:30 or 11:00 RBI Repo Rate
5:30 or 11:00 RBI Reverse Repo Rate
5:30 or 11:00 RBI CRR
9:30 or 15:00 UK CPI Y/Y
...Expected 2.80 % ...Previous 2.70 %
12:30 or 18:00 US Housing Starts
...Expected 920 K ...Previous 890 K
EU Trade Bal
...Actual 3.90 EUR Bln ...Previous 11.70 EUR Bln
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