Monday April 8, 2013 - 04:04:22 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Apr-2013 -0401 GMT
The Dow (14565.25) tested trendling Support at 14435 on Friday, but bounced back. The long-term uptrend remains in force as of now.
The Shanghai (2188, -1.68%) has opened gap down today after the Chinese holidays last week, to catch up with the fall in other markets. Most of Asia-Pac is in the red again today, with the exception of Australia (+0.25%), Malaysia (+0.12%) an Japan, where the Nikkei (13092) is up another 2%. We see danger of profit-taking in the Nikkei though, as there are Sellers coming in at higher levels. Take a look at the first chart on the following page:
The Nifty (5553.25) was battered last week Support at 5500 needs to hold this week in order to avoid a further decline towards 5400-5300.
Overall, we are hopeful of Equities moving up.
Gold (Spot 1579.16) has bounced today, as the long-term Range Support at 1540 has held on first testing. Long-term Resistance at 1620-30 might be tested while this Support holds.
Brent (104.33) has fallen further and might 103 this week. Unless Brent bounces strongly from there, it will be in danger of breaking the long-term uptrend since Dec-08. Take a look at the last chart on the following page:
A long-term decline in Brent should be good for the Rupee, if it happens.
The Euro (1.2988) trades relatively stronger and might test the crucial Resistance at 1.31 this week. Whether that breaks or holds is going to set the tone for the rest of the month. The Pound (1.5335) has gained handsomely over the last couple of days. It has some Resistance at 1.54 this week, but can rise to 1.55 if that breaks.
Dollar-Yen (98.39) trades higher still, opening gap-up today. No one has the courage to buy the Yen in the face of the BOJ's expansion, despite the Dollar being hugely Overbought. There can be chances of seeing 100. The Euo-Yen Cross (127.83) is looking very bullish (chances of 132) and suggests that the EURUSD may be able to move higher.
The Aussie (1.0375) has fallen below 1.04. With the long-term Resistance at 1.05 holding, there could be danger of a fall towards 1.02 in the coming weeks, unless Support at 1.03 holds.
Dollar-Rupee (54.81) needs to hold below 55.00-25 in order to provent further bullishness.
The Germany-USA 10-Yr Yield Spread (-0.49%) has risen further. This is good news for the Euro and potentially for "risk" trades.
The US 10-Yr (1.70%) has strong Support near current levels and should bounce. The continued fall in US Unemployment (7.6% now) could be good for long-term yields.
These charts suggest a possibility that "risk" trades could come back in.
No major data release today.
EU Retail Sales
...Actual -0.31 % ...Previous 0.83 %
...Actual -0.60 % ...Previous -0.60 %
...Actual 88.0 K ...Previous 268 K
US Unemployment Rate
...Actual 7.60 % ...Previous 7.70 %
CA Labour Force
...Actual -54.50 K ...Previous 50.70 K
US Trade Balance
...Actual -42.96 $ Bln ...Previous -44.46 $ Bln
...Actual 61.6 ...Previous 51.10
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