Wednesday June 5, 2013 - 03:39:50 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 05-Jun-2013 -0337 GMT
Stocks are vulnerable to further correction. Even the Dow could succumb.
The Dow (15177.54, -76.49, -0.50%) came off a bit yesterday. It still holds its overall uptrend Support line and is either going to see a strong bounce today or will break the Support at 15100 to target 14750. The trigger might come from the ADP Unemployment (expected +171K) report due today.
In Asia, the Nikkei (13499, -0.25%) could be vulnerable to a further decline towards 12900. This may/ may not be preceded by a bounce towards 14000. The Shanghai (2271) can see a dip towards 2250 from where it needs to bounce iin order to build on the recovery from the Dec-12 lows. That will be interesting to watch.
The Nifty (5919.45) has a confirmed Double Top and can fall towards 5850, maybe even 5750.
Gold (1405.20) is ranging sideways and has critical resistance in the 1415-25 region. Only if that breaks can Gold rise to 1450. Supports on the down side come in at around 1380-1375 region.
Brent (103.35) continued to move up after bouncing well from 100 the day before. Resistance seen at 1044 now. Breach above this could see a rise to 110 or else we may see a move back to 102.
Silver (22.53) has mostly remained range bound and may continue so till 22.80 gets broken on the upside. Supports come in at 22.10. Silver is definitely looking weaker than Gold for now.
Copper (3.36) has finally seen a rise above the resistance around 3.35 and may rally up to 3.45 in coming days as long as 3.35 holds as Support.
A bit of stability being seen in currencies, but the Dollar still retains overall advantage with the Dollar Index (82.77) trading above 82.20.
The Euro (1.3083) trades relatively strong and might try to break above crucial Resistance at 1.3115 if it manages to remain 1.3040. Data to watch today will be EU GDP (expected -0.2%) and Retail Sales (expected -0.2%) ahead of the ECB Meeting tomorrow.
Dollar-Yen (100.10) rose above 100 yesterday. It has bounced from the 13-week MA (98.69) but needs to break above 100.40 in order to move higher. Failure to do so would push it lower. Its correlation with the Nikkei continues to hold well.
The Aussie (0.9634) fell back sharply yesterday and is likely to trade up/ down within a wide range of 0.9550-9750 for the next few days. The AU GDP has come in at +0.6%, less than the expectation at 0.8%. The Pound (1.5312) is trading steady and sideways since yesterday and could be bracing for a rise towards 1.55 next week.
Dollar-Rupee came down a bit to close 56.4450 in late trade yesterday, but can find decent Support in the 56.25-15 region.
US 10-Yr (2.15%) has started moving up again after dipping a bit the day before. The Germany-USA 10-Yr Spread (-0.6%) is trying to rise slowly but needs to break above -0.55% in order for the Euro to really strengthen. The German 10-Yr (1.55%) looks like it can go up a bit more.
The ECB and BOE meetings are due tomorrow. Expectations from the ECB are muted.
The Indian 10-Yr GOI (7.20%) could move up a bit more as the market tones down expectations of an RBI cut.
1:30 GMT or 7:00 IST AU GDP
...Expected 0.80 % ...Previous 0.60 %
9:00 GMT or 14:30 IST EU GDP
...Expected -0.20 % ...Previous -0.20 %
9:00 GMT or 14:30 IST EU Retail Sales
...Expected -0.20 % ...Previous -0.10 %
12:15 GMT or 17:45 IST US ADP Emp
...Expected 171K ...Previous 119 K
...Actual 2.75 % ...Previous 2.75 %
US Trade Balance
...Actual -40.30 $ Bln ...Previous -38.83 $ Bln
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