Friday May 10, 2013 - 03:36:47 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 10-May-2013 -0333 GMT
Equity markets across the globe after having rallied relentlessly may look to go into a huddle for some days before resuming the up trend.
Dow Jones (15082.60, -22.50, -0.15%) consolidated most of yesterday in a narrow trading zone of 15046.87-15144.83. A few days of sideways move in most of the indices look likely. We see a very good support for the Dow between 14800-14900.
Dax (8262.55, +12.84, +0.16%) maintained it head above 8200 once again. Like the Dow, Dax too may look to consolidate in coming days. 7900-8000 is a very good support.
Nikkei (14584.70, +393.17, +2.77%) is up a staggering 400 odd points in trade. The rally has come on back of a Dollar-Yen breaking past 100. We view the Nikkei to find support around 1400.
Shanghai (2239.62, +6.52, +0.30%) is firmly holding up in trade around 2040 mark. The market can look to meander between 2025-2050 in days to come.
Nifty (6050.15, -19.15, -0.32%) ended the day lower around 0.3%. After a few days of up move the index chose to spend the day in consolidation. We view The market to meander in a narrow range between 5980-6080. The trading action may stay centered in the midcap space.
Most of the global commodities are yet to establish a decisive trend except Copper. Till then we can expect the commodity universe to trade choppy.
Gold (1459) is trading back below 1465. We may see a ranged consolidative move in Gold between 1450-1500. However we feel it will be difficult to trade in Gold as the price action can turn very choppy going forward.
Brent (104.30) has moved back above 104 in trade. We see Crude to stay ranged between 103-106 in coming days.
Silver (23.7550) like Gold has come down in trade. It is back below 24 and we expect Silver to trade between 23.20-24.20.
Copper (3.330) can continue to trade positive as long as it maintains its head above 3.30. We expect Copper to trade between 3.25-3.45.
The Euro (1.3041) has come down below 1.3050 as dollar has strengthened yesterday. With equity markets across the globe likely to take a breather, the Euro can stay subdued for now. As the currency pair has slipped to lower end of the trading band between 1.0350-1.3250 we see The Euro to stay soft for some days. Strong supports come in at 1.2950.
Dollar-Swiss (0.9491) has moved up on strength in dollar and is approaching a resistance of 0.9520. Supports come in at 0.9430.
Dollar-Yen (101.00) has finally achieved our target of 101 on Yen weakness and Dollar strength. We view the uptrend to remain intact and see 99 as a good support going forward.
The Euro-Yen (131.71) too has decisively breached 130 on the upside on the back of weakness in Yen. The currency pair can target 134 in coming days and view 128 as a strong support for the currency pair.
The Pound (1.5443) has broken below the 200 day moving average support at 1.5480 and may slip lower to 1.5380 if dollar continues to stay strong.
The Aussie (1.0085) has now broken below 1.015 and has become extremely weak. Now the Aussie can dip lower below 1.000.
The Singapore Dollar (1.2353) has rebounded back above 1.235 on strength in dollar.
Dollar Index (82.73) has clawed its way back above 82.50 and may target 83.25 if equity markets stay sideways for some days.
Dollar-Rupee (54.255) continued to meander away between 54.15-54.31. It tested 54.30 on the upside but was not able to breach it and move higher. Finally the Dollar-rupee closed at 54.2550. We view the Dollar-Rupee to remain ranged between 54.10-54.45 in coming days as Nifty may look to consolidate in a tight trading band going forward. The IIP figures for March will be keenly watched .
The Indian-10yr (7.64%, -0.78%) has moved lower below 7.7% and can look to stay ranged between 7.65%-7.75$%. The bond market will be keenly watching the IIP data which is due today.
The USA-10-Yr (1.78%) has moved to 1.78% as expected. Now we view the US-10yr to hold steady around current levels for some days.
The Japanese-10Yr (0.56%) can see a move to 0.58% if equity markets remain flat to sideways in coming days.
4:30 GMT or 10:00 IST IN Trade bal
...Previous -10.31$ Bln
4:30 GMT or 10:00 IST IN IIP
...Previous 0.60 %
8:30 GMT or 14:00 IST UK Trade Balance
...Expected -8.9 £ (Bln) ...Previous -9.4 £ (Bln)
12:30 GMT or 18:00 IST CA Labour Force
...Expected 13.50 K ...Previous -54.50 K
Australia Labour Force
...Actual 50.10 K ...Previous -15.77K
...Actual 0.50 % ...Previous 0.50%
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