Tuesday May 7, 2013 - 03:43:42 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 07-May-2013 -0340 GMT
After the big move in equities and commodities last week, we expect a few days of sideways grind for most risky asset classes.
Dow Jones (14968.90, -5.07, -0.03%) After the big rally on Friday has consolidated better part of yesterday in a narrow band of 100 points. We expect the index to trade between 14800-15200 going forward.
Dax (8112.08, -10.21, -0.13%) too like the Dow has traded sideways. We expect a trading range of 7900-8200 in coming days.
Nikkei (14080.10, +386.04, +2.82%) is up close to 400 points. This move is not unexpected as the Nikkei had missed the global rally as it was closed in trade yesterday. The index has moved up above 14000 and we feel 13900 to be a goood support in the shorter term.
Shanghai (2232.99, +1.64, +0.08%) is trading flat. It has moved above the rsistance area of 2225-2230 and can attempt to move higher from here. A probable trading band of 2210-2275 is quite likley in coming days.
Nifty (5971.05, +27.05, +0.46%) was up half a percent in trade yesterday. Nifty too like all the global indices can look to consolidate in the short term. Upsides for the Nifty look capped around 6030-6080 and supports stand around 5880-5930. So we feel the Nifty to trade between 5900-6050, better part of this week.
Gold (1466) is back below 1475 after making an unsuccessful attempt to breach this level on the upside. This move in Gold tells us that the yellow metal is looking to go down for now. We expect it to move to 1450 in coming days.
Brent (105.16) is trading above 104 and technically that opens up a target of 106 on the upside. The levels in Brent have shifted up and we expect it to trade between 103-106 in the next few trading sessions.
Silver (23.71) has continued to trade weak as expected and has moved below 23.80. This opens up lower levels for Silver and we expect it move down to 23 in a few days. However this downtrend can only get negated if Silver manages to close above 24.
Copper (3.3205) is looking most active in the commodity universe. A short term bottom seem to have been put in place for copprer and we expect it to touch 3.45 in coming days. Supports look likely to come in around 3.25.
The Euro (1.3078) is back below 1.31 after having tested 1.350 levels last Friday. We expect the Euro-USD to trade in a range of 1.3050-1.3250 in coming days and remain consolidative. Medium charts for the Euro continue to stay stable and we view the 200 day moving average around 1.2975 to act as a good longer term support.
Dollar-Swiss (0,9383) has held on to the recent gains and can see a short term up move to 0.94-0.9430. On the medium term we expect it to stay ranged between 0.9330-0.95.
Dollar-Yen (98.96) has moved higher after better than expected data from the US.The currency pair has found support around 97 as we had viewed it to do so. We expect 100 to be a critical reistance. Support comes in around 98.
The Euro-Yen (129.42) cross is trading above 129 after testing 127.88 last week.We feel the Euro-Yen can attempt a move to 134 in coming days if it closes above 130.
The Pound (1.5543) has not been able to breach the level of 1.56 (a key fibonacci retracement level)on the upside as forecasted and has moved lower.However the 100 day moving average around 1.5482 is a key support area that will get respected. So we view the Pound to trade between 1.55-1.56 going forward till 1.56 is breached decisively on the upside.
The Aussie (1.0246) has lost almost all the gains it made last Friday. The shorter term trend in Aussie looks more on the downside. We see a suopport for the Aussie around 1.0225 but if that gets breached, 1.02 becomes the likley downside target which however will attract buying. Immediate Upside resistance for the Aussie comes in at 1.0308.
The Singapore Dollar (1.2307) has moved back to 1.23 levels after having fallen to 1.20 levels. A close above 1.23 can take the currency pair to a target of 1.2375.
The Brazilian Real (2.0110) continues to trade relatively weak/ undecided.
Dollar-Rupee has closed higher yesterday at 54.185/195. We expect it remain rangebound in trade and can see it trading above 54.00 in the next few trading sessions.
The USA-10-Yr (1.7495,+0.15) in slightly up in trade. With comments coming from the White House that the US government will take all possible measures to bring back growth in the US, we expect the Fed to continue its bond purchase program.
Like the US,the Japanese 10 yr (o.561) looks to stabilize around 0.5% on strong demand from the Japanese Central bank to bring back growth in Japan.
The Spanish and Italian 10-Yr(4.04% and 3.82% respectively)looks stable.
1:30 GMT or 7:00 IST Australia Trade Balance
...Expected 0.20 $Bln ...Previous -0.18 $Bln
4:30 GMT or 10:00 IST RBA Meeting
...Expected 3.00 % ...Previous 3.00 %
EU Retail Sales
...Actual -0.10 % ...Previous -0.21%
...Actual 52.2 ...Previous 61.60
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