Thursday May 16, 2013 - 03:38:55 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 16-May-2013 -0337 GMT
Nifty (6146.75, +151.35) has succesfully taken out the resistance around 6100 and closed above it. This is very bullish. If it manages to hold onto the gains over today-tomorrow, we may see Nifty heading higher towrds 6300 in the medium term. Strong supports around 6000-5950.
Dow Jones (15275.70, +60.44) has closed higher by 60 odd points yesterday. The Dow Jones may continue to move higher from here but we need to keep in mind that supports are much lower at 14900-14800 and therefore we need to keep ourself prepared for any sudden downward correction.
Dax (8362.42 ,+23.31) too closed marginally higher by 23 odd points yesterday. We see good support for the Dax at 8200.
After having seen phenomenal rally for the last few days, the Nikkei (14933.00, -163.08) has finally taken a breather. It is down a bit in trade and a correction towards 14500 will provide fresh legs for the Nikkei to move much higher.
Shanghai (2,237.95, +13.32) is trading higher after having bounced from the supports of 2220-2210. We expect this move to take Shanghai upto 2250 levels where it may face some good resistance.
Gold (1,395.20) has crashed below 1400, in line with our long-term bearishness. A test of the previous lows near 1350-1325 should be possible now, while below 1420.
Brent (103.33) is back above the 103 mark in trade. We expect the Brent to continue to trade in a zone of 101-104 going forward.
Like Gold, Silver (22.70) has seen a big fall. The charts look beraish and we may see it heading to 22.20 while below 23.
Weakness in commodities is showing in Copper (3.2800) also and it may head lower to 3.25. However we may see Copper bouncing back to 3.35 from 3.25.
Euro (1.2871) is holding above the very crucial support of 1.2851 and we look for a bounce towards 1.2930, as suggested yesterday.
Dollar-Swiss (0.96573) is maintaining above the 0.96 mark for the while. If Euro sees a bounce from the current levels then we may see some dip in the Dollar-Swiss to 0.9550.
Dollar-Yen (102.112) is maintaining above the 102 levels and may target 103 in coming days. However if the Nikkei remains sideways we may see the Yen strengthen. In that case the Dollar-Yen may see a dip to 101.
The Euro-Yen (131.462) has cooled of a bit and has fallen below 132. With weakness in the Euro and and likely consolidative action in the Nikkei, the Euro-Yen may see moving sideways between 130.00-132.50 levels.
The Pound (1.5229) is also closing in on a short term support of 1.52. We may see the Pound bounce a bit if the Euro manages to hold on to the support of 1.2850.
The Aussie (0.9904) continues to stay beraish below 1.00. However looking at the oversold nature of the charts, we may see a short bounce to 0.998, but the fall in Gold could keep the Aussie weak.
The Singapore Dollar (1.2446) had seen a good rally in the last few days and may look to add more if dollar continues to stay strong. We may see the USD-SGD target 1.25 going forward. There is a resonable support around 1.2375.
Dollar-Rupee (48.79) is reacting more to the EURUSD (1.2851) which has come down to a crucially important medium-term Support trendline. The chart of Dollar-Rupee is not too encouraging right now and may see a move too 55.10-55.20 going forward. If there is a bounce in the Euro-Dollar, we could see Dollar-Rupee fall below 54.70 today
As suggested yesterday, the US 10-Yr (1.93%) has found some Resistance just above 1.98% and has come off a bit. It might stabilise below 2.0% for some days before attempting to move higher. The Germany-USA 10-Yr yield spread (-0.55%) has bounced back a bit from the -0.60% level which should give some relief to the Euro.
The 10-Yr India GOI (7.46%) fell to near 7.37% yesterday, but has bounced back a bit on intra-day basis. But the yields can fall again towards 7.37% and lower. The longer term target could be near 7.13%, but that could take time. The fall in GOI yields can either lead to a further rise in Equities and thus to Rupee strength. Or it could work the other way round that a fall in Indian yields might make the Rupee less attractive. We have to see how this plays out.
The sharp rise in Japanese yields (10-Yr 0.8993%) is a worry as it suggests chances of a further rise towards 0.95%-1.00% despite the large balance sheet expansion by the BOJ. This too needs to be watched carefully.
23:50 GMT or 5:20 IST JP GDP
...Expected 0.70 % ...Previous 0.00 %
9:00 GMT or 14:30 IST EU Trade Bal
...Previous - 10.40
9:00 GMT or 14:30 IST EU CPI (YoY)
...Expected 1.80 % ...Previous 1.70 %
12:30 GMT or 18:00 IST US Core CPI (MoM)
...Expected 0.20 % ...Previous 0.10 %
12:30 GMT or 18:00 IST US Housing Starts (Mln)
...Expected 980 K ...Previous 1036 K
...Actual 7.80 % ...Previous 7.90 %
...Actual -0.20 % ...Previous -0.60 %
US PPI ex Food & Energy (MoM)
...Actual 0.11%...Previous 0.16 %
US TICS (Net foreign purch of long-term Sec)
...Actual 13.53 $ Bln ...Previous -17.84$ Bln
US Industrial Production
...Actual -0.5 % ...Previous 0.30%
US Capacity Utilization
...Actual 77.8 % ...Previous 78.3 %
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