Tuesday April 30, 2013 - 03:35:43 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 30-Apr-2013 -0333 GMT
All the major global indices are approaching key resistance levels and we expect most of the global markets can be subjected to some profit booking going forward.
Nifty (5904.65, +32.10, +0.56%): After a pause on Friday the Nifty has closed above 5900 which is a bullish outcome. The possible level of trade for the index can be between 5850-5950 in coming days.
Nikkei (13824.50,-59.59,-0.43%): Nikkei is trading lower by 59 points. We feel that the index could likely trade between the range of 13900-14000 on the upside and 13600 on the downside.
DAX (7873.50, +58.74, +0.75%): Has closed higher by 50 odd points and is now near a very critical resistance zone of 7900. Profit taking can come in at current levels. Likely support for the Dax comes in at 7600.
Dow Jones(14818.80, +106.20, +0.72%): Has closed higher and like the Dax it is also closing on a very important resistance band of 14900. So some retracement from current level is quite possible. Support stands at 14600.
The corrective rally in global commodities over the last few days is approaching short term resistance levels now.
Gold (1470.90, +3.50, +0.24%): Is not too far away from a supply area of 1475. We can expect to see selling emerge from current levels.
Brent Crude (103.64, -0.17, -0.16%): Has closed above range resistance zone of 103, but can face Resistance near current level on the 21-day MA.
Silver (24.355, +0.233) : We maintain our cautious stance on Silver as it approaches the important resistance band of 25. Supports are much lower and therefore risk reward ratio favors a short trade.
Copper (3.2375): 3 .25 will be a key level to watch going forward. Unless this level gets breached decisively on a closing basis, Copper will continue to trade weak.
The Euro (1.3096) faces Resistance near current levels today after having risen well yesterday. It has managed to remain above 1.30 after having bounced from near the 200-day MA (1.2950) last week. It is to be seen if it manages to rise past 1.3120 or not. The Dollar Index (82.14) is trading a little softer on Euro strength. Dollar-Swiss (0.9375) has fallen below 0.9400 and has good chances of falling towards 0.92 now. This could push the Euro higher as well.
Dollar-Yen (97.89) dipped to 97.35 yesterday but seesm to be finding Support near the 21-day MA (97.99). A period of sideways trade between 97-100 is a possibility, the other being a break below 97 targeting 94. The Euro-Yen Cross (128.20) might also trade ranged between 126.50-130.00 for a few days. Such sideways consolidation would be understandable after the prolonged rise earlier in the year.
As expected, the Pound (1.5480) saw some profit-taking yesterday, coming down from 1.5546. It can drift down towards 1.5350 over the course of the week. The Aussie (1.0345) rose well yesterday and may now rise towards the upper end of 1.0200-0450 range we suggested yesterday.
The Singapore Dollar (1.2338) strengthened yesterday but needs to consolidate near current levels for a while before being able to gain past 1.2300. The Brazilian Real (2.0075) has weakened from a level of 1.9806 seen yesterday. It is consolidating below 2.0250 (200-day MA), but the outlook is uncertain.
Dollar-Rupee (54.2550) continues to trade sideways and might dip to 54.16 today.
A raft of central bank meetings coming up. US FOMC Meeting on 1st May. ECB Meeting on 2nd May. RBI Meeting on 3rd May. The Fed may be expected to squash talks of an early exit from QE as recent data has been soft. The ECB and the RBI are expected to cut rates by 25 bp.
The US 10-Yr (1.67%) trades below 1.70% suggesting chances of decline towards 1.55%.
The USA-Japan and Germany-Japan 10-Yr Yield Spreads are looking like they can see a strong bounce. This would suggest that Japanese yields could fall. That in turn would mean lesser market faith in chances of a rise in inflation. But a rising yield differential should lead to a weaker Yen. This is something to watch going forward.
23:01 GMT or 4:31 IST UK Cons Conf
...Expected -26 ...Previous -26
23:15 GMT or 4:45 IST JP PMI
...Previous - 50.40
23:30 GMT or 5:00 IST JP Unemp
...Expected 4.30 % ...Previous 4.30 %
9:00 GMT or 14:30 IST EU Unemp
...Expected 12.10 % ...Previous 12.0 %
12:30 GMT or 18:00 IST CA GDP
...Expected 0.20 % ...Previous 0.20 %
13:00 GMT or 18:30 IST US Case Schiller
...Expected 9.10 % ...Previous 8.11%
14:00 GMT or 19:30 IST US Cons Conf
...Expected 60.60 ...Previous 59.70
EU Biz Climate
...Actual 88.6 ...Previous 90.0
US Personal Income
...Actual 0.23 % ...Previous 1.12 %
US PCE Price Index M/M
...Actual 0.18 % ...Previous 0.68 %
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