Friday May 17, 2013 - 04:07:13 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-May-2013 -0403 GMT
Increasing chances of profit-taking after the recent rise in Equities worldwide.
Nifty (6169.90, +23.15, +0.38%) has to hold on gains today if we have see 6300 by month end. The immediate Supports to watch are 6100-6080.
Dow Jones (15233.20, -42.47) has dipped 42 points and could fall to 14900 on profit booking
Dax (8,369.87, +7.45) remained lacklustre yesterday. The upmove of the last 4 weeks is slowing down and a corrective dip towards 8200 is likely.
The Nikkei (15014.40, -22.87) and Shanghai (2255.13, +3.41) are mostly trading flat. Like the Dow and the Dax, Nikkei may remain sideways in the coming days and may retreat down to 14600-14500. Shanghai was expected to rise towards 2250 and now may test 2275 after a few days of sideways move. The supports around 2230-2225 look likely to hold.
Gold (1383.90) and Silver (22.60) continue to trade weak. Gold may dip down to 1360 from where we might see a small move to 1400. Silver looks weaker of the two and may head down to 22.10-22.00 in coming days. Silver has a resistance around 23.
Brent (103.55) is back above the 103. We expect the Brent to continue to trade in a zone of 101-104 going forward.
Weakness in commodities is showing in Copper (3.288) also and it may head lower to 3.25. However we may see Copper bouncing back to 3.35 from 3.25.
The Euro (1.2863) is clinging onto the supports of 1.2850-1.2860 with all its might. The bounce in the yield spread (see Interest Rates section) could give a relief to the Euro. In case the support holds we may see a move 1.2980-1.2999. But if the Euro dissapoints we may see it heading towards 1.28 and lower.
Dollar-Swiss (0.9663) may move upto 0.97 in coming days. Supports come in at 0.9630-0.9600.
The Dollar-Yen (102.29) has more or less achieved the upside target of 103. Profit booking is likely to emerge which may see the currency pair move down to 101.
The Euro-Yen (131.56) will take cues from the move in Euro. We expect the currency pair to stay ranged between 132-130.
The Pound (1.5245) has managed to bounce from 1.52 levels as the charts looks oversold on the shorter time frame. Now we may see the Pound attempt a move up to 1.5320 in coming days, but could come off again from there.
The weakness in Gold has further aggrevated the down trend in Aussie (0.9762). The earlier support around 0.98 has been broken and the Aussie may now test the June-12 low near 0.96.
The Singapore Dollar (1.2513) had seen a huge rise past 1.25 and can target 1.2560 now. There is a resonable support around 1.2450.
Dollar-Rupee (54.77) had closed yesterday near the higher end of the 54-55 range and had opened near 54.87 today. We expect a broad trading range of 55.10-54.50 to hold in coming days.
The US 10-Yr (1.88%) has dipped back a bit as the the Resistance at 2.00% holds. Expect consolidation for a few days before a break above 2.0%.
Japanese yields have been rising since 09-April. The Preliminary Q1 GDP yesterday was +0.9% Q/q, non-annualised. There is a very wide divergence between the Dollar-Yen and the US-Japan 10-Yr yield spread (1.05%) which suggests that Dollar-Yen could see profit-taking. Take a look at
Next week's BOJ Meeting should be interesting for further direction on Japanese bonds.
The Germany-USA 10-Yr Spread (-0.55%) is holding above -0.60% and could form a Double Bottom if it manages to remain above -0.60% through next week. The German 2-Yr (-0.01%) has dropped below 0% again. The Italian and Spanish 10-Yr yields, 3.98% and 4.26% respectively, have moved up recently, within an overall downtrend. The Eurozone Q1 GDP (-0.20% Q/q) released earlier this week has been a big disappointment on Y/y basis. A rise back to growth could take longer than the ECB's hope of growth in H2-13.
The 10-Yr GOI (7.43%) is in a steep downtrend and can see 7.37%, quite possibly lower, soon.
12:30 GMT or 18:00 IST CA Inflation Y/Y
...Expected 0.90 % ...Previous 1.00 %
...Actual 0.90 % ...Previous 0.00 %
EU Trade Bal
...Actual 22.90 EUR Bln...Previous 10.10 EUR Bln
EU CPI (YoY)
...Actual 1.20 % ...Previous 1.70 %
US Core CPI (MoM)
...Actual 0.08 % ...Previous 0.10 %
US Housing Starts (Mln)
...Actual 853 K ...Previous 1036 K
US Philifed Index
...Actual -5.2 ...Previous 1.3
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