Tuesday March 26, 2013 - 03:35:25 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 26-Mar-2013 -0333 GMT
The Dow (14447.75, -64.28, -0.44%) retreated on the "Cyprus Template" scare. A dip to 14250 would be good, making for another upmove later.
Asia-Pacific is mixed, not fully in the red. The Shanghai (2282, -1.91%) hits serious profit-taking much before the strong Resistance at 2400 mentioned yesterday. The Nikkei (12517, -0.24%) is seen consolidating between 12200-700 for some days. There may even be danger of a fall below 12200 given the Overbought condition in the Nikkei.
The Nifty (5633.85) may well slide further towards 5600 today on the fall in the Euro and the Dow.
Gold (1601) has come off from last week's high near 1616-17. Good Resistance is seen at 1625 in the medium term. Yesterday we'd said that Gold could rise to test 1625-40. But, that does not seem to be happening. In any case, while below 1625-40, Gold might yet fall towards 1550-35 in the long term.
Brent (108.01) rose to 109 yesterday, but has come off a bit. It seems to be trying to break the downtrend it has been in since 119 in February. The Brent-WTI Spread (near 13) can fall to 12 as the WTI (95) rises towards 96.
The Euro (1.2870) has taken it on the chin. The market is mortally afraid of the "Cyprus Template" being used elsewhere in Europe. The break below 1.29 opens up chances of a decline to 1.27.
The Yen (94.35) gained to as much as 93.53 in the US session yesterday. 94.50 is a Resistance now while 93.50 is Support. There is a danger of a further profit-taking dip to 92.65 ahead of the BOJ Meeting next week. A large Double Top in the Euro-Yen (121.35) targeting 118 can pressurise Dollar-Yen also.
The Pound (1.5177) has come off from yesterday's high near 1.5260 on profit-taking finding Resistance near the 8-week MA at 1.5245. But, with Support at 1.5150, the Pound might attempt to rise past 1.5245-60. The Aussie (1.0449) is in an overall uptrend with Support at 1.0425 and an eventual target near 1.0500-25.
The USD-SGD (1.2415) has fallen for the 4th day today, as Singapore gains at the expense of Europe. The Brazilian Real (2.0162) has risen again over the last two weeks and may try to rise further in the coming weeks. The Rouble (30.93) also continues to weaken with chances of seein 31.10 in the coming days.
Dollar-Rupee (54.1750) may well rise towards 54.40 again, given the weakness in the Euro and BRIC currencies.
The US 10-Yr (1.93%) has fallen further and should be targeting 1.85-75% as the Euro situtation gets worse before it gets better.
However, note that the German-US 10-Yr Spread (-0.59%) has long-term Support near -0.65%. The German-US 2-Yr Spread (-0.21%) also has Support near -0.30%. Take a look at
Therefore, weakness in the Euro could be limited to 1.27
12:30 or 18:00 US Durable Goods Orders
...Expected 3.80 % ...Previous -4.89 %
13:00 or 18:30 US Case Schiller
...Expected 7.90 % ...Previous 6.88 %
14:00 or 19:30 US New Home Sales
...Expected 426 K ...Previous 437 K
14:00 or 19:30 US Cons Conf
...Expected 69.30 ...Previous 69.60
No major data release yesterday.
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