Thursday May 30, 2013 - 03:34:44 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 30-May-2013 -0332 GMT
Most of the asset classes after having seen a dip are approaching short term resistance. So we may see sideways action in most markets in coming days as the trend may remain unclear.
Nifty (6104, -7) may remain volatile as we near the F&O expiry. The Nifty might remain ranged between 6120 to 6040 on the expiry day.
Dow Jones (15302.80, -106.59) found selling around the channel resistance around 15500. The market has moved back to the supports around 15300. We have to see whether this support holds.
Dax (8336.58, -144.29) was also down around 1.5% yesterday. The market has moved back to the supports of 8250 once again. This indicates that the rally is probably tiring out.
Nikkei (13932.92, -393.54) has broken the crucial supports around 14000 and may slip down to 13500 in coming days.
Shanghai (2321.87, 2.07) may see this rally move higher to 2375 where it will likely face strong resistance. Supports come in at 2300.
Gold (1,395.50) is moving close to the crucial resistance around 1410. Breach above 1410 may see Gold move higher to 1470 else we may go back to the 1350 levels once again.
Silver (22.45) is weaker than Gold and looks more likely to trade side ways between 22.80 to 22.00.
Brent (102.60) has retreated back from the 104 levels and may look to settle around the supports of 102. Breach below 102 may see the market slip to 99 odd levels.
Copper (3.29) has remained sideways and may continue to remain ranged between 3.35 to 3.25 in coming days.
The Euro (1.2960) saw good bounce from the supports around 1.2850. If the levels of 1.3010 is taken out we may see the Euro move to 1.3050. Else the Euro may remain ranged between 1.30 to 1.28.
Dollar-Swiss (0.96115) has retreated back to 0.96 as Euro (1.2954) has strengthened. The market is around a good support around 0.96. We have to see whether this support holds in coming days.
The Dollar-Yen (101.126) has moved back lower after the Yen strengthened. Dollar-Yen may go down to 100 if the supports around 101 get broken.
The strength in Yen has also seen the Euro-Yen (130.98) move lower. However the market is also approaching a very critical support around 130.50.
The Pound (1.51264) has rallied after the Euro (1.2954) strengthened .We may see the Pound target 1.5150 to 1.5170 from where the rally may peter off.
Bounce in Gold and weakness in Dollar has pulled the Aussie (0.9646) back above the 0.96 levels. We may see the Aussie attempt a move towards the 0.97 levels.
Dollar-Rupee (56.17) may open lower on the weakness in Dollar. We may see the Rupee strengthen towards the 55.90 levels. The range for the coming days looks more likely between 56.20 to 55.80.
Diverse movements in interest rates in the non-developed world. Brazil has increased rates by 50bp to fight inflation whereas Thailand has cut its Repo rate by 25bp to combat a recent slowdown in growth and to counter a strong Baht. Brazil is the only G20 country increasing rates.
The 10-Yr GOI (7.17%) has fallen below earlier target of 7.35% and may well see 7.0% and lower now. There is some Support at 7.10%, being the 50% retracement of the rise from 5.24% (Jan-09) to 8.97 (Nov-11). The market has fully pricing in a further rate cut by the RBI on 17-June. A corrective bounce in yields could be on the cards.
The next FOMC meeting is on 19th June. The markets are vigorously pricing in a reduction in the QE programme. The US 5, 10 and 30-Yr yields (1.03%, 2.14% and 3.28% respectively) are up sharply breaking earlier resistances. The rise in US yields has hurt most other currencies recently, including the Rupee. But the German-US 10-Yr Spread (-0.61%) is now close to long-term Support at -0.65% and could bounce back up in the coming days/ weeks. As German yields are also rising (10-Yr 1.54% is up from 1.20%), the Euro could find Support above 1.28.
5:45 GMT or 11:15 IST CH GDP
...Expected 0.2 % ...Previous 0.2 %
9:00 GMT or 14:30 IST EU Biz Climate
...Expected 89.0 ...Previous 88.60
12:30 GMT or 18:00 IST US GDP
...Expected 2.50 % ...Previous 2.48 %
...Actual 1.00 % ...Previous 1.00 %
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