Monday June 3, 2013 - 03:36:38 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 03-Jun-2013 -0334 GMT
Most Equity markets are seeing profit-taking over the last few days after having moved up well in the earlier part of May. Some more correction may happen before a bit of stability comes in.
The Dow (15115.57) fell sharply on Friday and is now testing an uptrend line coming up from the beginning of the year. If the Support near current levels breaks, the Dow could be vulnerable to a further dip towards 14750/14500 this week ahead of the crucial NFP data on Friday.
Most of Asia-Pac is in the red today. The Nikkei (13511.53, -261.78, -1.90%) is down further today after last week's fall, but has a crucial intra-week Support near 13400 which might hold on first testing. But there are chances of seeing 12800-600 in the medium term. The Shanghai (2304, +0.13%) has Resistance at 2325 and could dip towards 2275 in the early part of the week.
The Nifty (5985.95) saw a sharp fall on Friday and is vulnerable to a further fall towards 5800 as there is a clear Double Top on the charts.
Gold (Spot 1394.63) has come off again after the brief rise to 1425 late last week. We remain bearish as the price is unlikely to move above 1450 and the charts are likely to inflict serious pain on Buyers.
Brent (100.21) fell sharply late last week and should be on its way to test 98 this week. Some bounce could happen from there.
Silver (22.35) continues to look ugly to us and has chances of seeing sub-20 levels while below 24.25.
The Euro (1.3008) is putting up a spirited fight, trying to avoid a fall below 1.2950, but it has a crucial Resistance 1.3060 that needs to be broken if has to move higher. Dollar-Yen (100.68) has fallen alongwith the Nikkei through last week and might fall further towards 99.05 if the Nikkei falls as envisaged. The Euro-Yen Cross has been ranging sideways between 130-132 over the last few days. It has Support near current levels on the Weekly charts and its direction is unclear in the near term.
The Aussie (0.9615) has fallen sharply through May, but has a crucial Support near 0.9515, 100 points lower. It could see a bounce as the market is sitting higely Short now. The RBA Meeting is due tomorrow. The Pound (1.5209) has bounced a bit from the 1.5000 level last week and might test Resistance near 1.5340 this week. If so, there could be chances of seeing further gains later in the month.
While the bigger currencies seem like they could put up a bit of a fight against the US Dollar, the EM currencies are looking weak.
The Brazilian Real (2.1360) has weakened substantially last week. The Sing Dollar (1.2618) might weaken towards 1.2650 again while above 1.2550. But a break below 1.2550 (if seen) could lead to some strength.
Dollar-Rupee (56.50) had seen a sharply fall from 56.76 in the last few hours of trade on Friday. We see chances of the Rupee strengthening a bit towards 56.40-20 as it looks a little Oversold against many other currencies.
A series of central bank meetings this week. RBA tomorrow. BOE and ECB on Thursday. Then the crucial US NFP data on Friday. Next week brings the BOJ Meeting on 11th June.
US 10-Yr (2.14%) yields have moved up sharply through May and remain in an uptrend for now. The market might get into some consolidation next week if the NFP data is not too strong. The next FOMC meeting is later this month on 19th June.
An important development is that Italian and Spanish yields (which have moved up through May) face important Resistances near current levels in an overall larger downtrend. This gives some hope for beleagured Europe.
The Indian 10-Yr (7.25%) is seeing a corrective bounce as the market debates whether or not the RBI will do another rate cut.
23:30 GMT or 5:00 IST AU PMI
...Expected 40.0 ...Previous 36.7
4:30 GMT or 10:00 IST IN PMI
...Expected 50.0 ...Previous 51.0
7:15 GMT or 12:45 IST EU PMI
...Expected 47.8 ...Previous 46.7
7:30 GMT or 13:00 IST CH PMI
...Expected 50.9 ...Previous 50.2
8:30 GMT or 14:00 IST UK PMI
...Expected 50.3 ...Previous 49.8
14:00 GMT or 19:30 IST US Manufacturing ISM
...Expected 50.60 ...Previous 50.70
...Actual 51.5...Previous 51.1
...Actual 4.10 % ...Previous 4.10 %
UK Cons Conf
...Actual -22.00 ...Previous -27
...Actual 4.80...Previous 4.50 %
...Actual 12.2 % ...Previous 12.1%
US Personal Income
...Actual 0.10 % ...Previous 0.23 %
US PCE Price Index M/M
...Expected -0.20 % ...Previous 0.10 %
...Actual 0.20% ...PREVIOUS 0.30%
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