Monday May 13, 2013 - 03:52:42 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 13-May-2013 -0349 GMT
Most of the equity markets are in uncharted zone fuelled by liquidity and we expect the trend to continue.
Dow Jones (15118.50, +35.87, +0.24%) closed positive in trade and may continue to move higher from current levels. The Dow has a strong support around 14950-15000.
Dax (8278.59, +16.04, +0.19%) was marginally up on Friday. We expect the Dax to trade firm going forward. 8200 seems a good support for the market.
Nikkei (14812.70, +205.19, +1.40%) is on a dream run. It is up another 200 odd points in trade on further weakness of the yen.
Nifty (6107.25, +12.50, +0.21%) closed above 6100 and can look to add on to gains after last week. The markets may look to trade sideways between 6030-6150 with a positive bias.
Shanghai (2241.27, +5.54, +0.25%) is down 6 odd points in trade. We expect the index to trade between 2225-2250 till we see the level of 2250 being decisively breached on the upside.
The turmoil in the currency market has had its effect on global commodities and the trend in most of them has turned weak except Copper.
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 (1,432.30) moved below 1450 on strength in dollar and weakness in the Aussie. A retest of 1425 is very likely. The trend in Gold will remain weak below 1475. Immediate Upside resistance comes in at 1450.
Brent (103.16) has moved below 104 in trade. We see Crude to stay ranged within 102 to 104 in coming days.
Silver (23.65) has broken below 23.80 on weakness in global commodities. It is expected to trade lower and target 23 in coming days. Resistances come in at 24.
Copper (3.35) is trading positive despite the turmoil in currency market and in global commodities. We expect Copper to trade between 3.25-3.45 going forward.
All the major currencies retreated against the Dollar after the Dollar Index zoomed past 83. The trend in dollar will stay up till dollar index dips below 83.
The Euro (1.2973) has broken below the trading band of 1.3050-1.3250 and is hovering around the very critical 200 day moving average. We may see the Euro find support around this region and a small bounce to 1.3050 cannot be ruled out.
Dollar-Swiss (0.9591) has seen a huge spike in trade. The currency pair can stay upbeat if trades above 0.95. Upsides can face resistance at 0.96.
Dollar-Yen (101.86) has surged above 101 on fresh weakness in Yen after the G7 meet has agreed on Japanese Central Bank's decision to keep Yen weak. We expect the mood of the USD-JPY to stay upbeat on the back of these positive developments. Supports can come in at 100 and upside targets have opened up to 103.
The Euro-Yen (132.18) has broken out of a trading range and can look to move up on renewed weakness of the Yen. We view the currency pair to touch 134 in coming days as long as it trades above 130.
The Pound (1.5349) has come down to a short term support around 1.53. If this support is held we may see the Pound attempt 1.543 in coming days. However a breach of 1.53 can take the currency pair much lower to 1.52.
The Aussie (0.9984) is trading weak and has moved lower below 1.00. The Aussie has turned bearish and any up move will be sold into. A trading band between 0.995-1.005 with chances of a move too 0.995 looks more likely.
The Singapore Dollar (1.2396) has moved back above 1.2370 on dollar strength and may target 1.2420 in coming days.
Dollar-Rupee (54.80) Contrary to our view the Dollar-Rupee spiked up in trade and broke past the intermediate resistance of 54.60 and closed around 54.80. Now the Dollar-rupee can stay elevated in a trading range of 54.50-55.00.
The Indian-10yr (7.59%, -0.32%) has come down on hopes of further interest rate cut by RBI. The market will keep a close eye on the inflation data which is due to come in today.
The USA-10-Yr (1.9242, -0.68%) has jumped to 1.9% on anticipation of possibly strong demand in auction of 10-year government debt. Longer-dated yields rose on better than expected macro data across the globe.
The Japanese-10Yr (0.7544, -0.52%) has seen a huge surge in trade and has spiked all the way from 0.56.
12:30 GMT or 18:00 IST US Retail Sales
...Expected -0.30 % ...Previous -0.57 %
...Actual 2.50%...Previous 0.60 %
UK Trade Balance
...Actual -9.1 £ (Bln) ...Previous -9.2 £ (Bln)
CA Labour Force
...Actual 12.50 K ...Previous -54.50 K
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