Tuesday June 11, 2013 - 03:36:19 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Jun-2013 -0333 GMT
Marginal rise in the Dow (15238.59, -9.53, -0.06%) yesterday after the big rise on Friday. Upmove remains in place for now. Do not know whether a rise past 15400 will sustain or not. US Retail Sales (Thursday) is an important data to watch.
The Nikkei (13493, -0.16%) rose yesterday but is down marginally. China is closed till tomorrow. Most of Asia-Pac is down, ranging from -1% (Hong Kong) to +0.23% (Australia). Failure to rise above 13750 makes Nikkei vulnerable to a fall towards 11750. BOJ Meeting is on just now. But, the Nikkei could get some Support, given that it is Oversold on the Daily charts
The Nifty (5878.00) waas ranged/ down yesterday and is vulnerable to a fall towards 5850 and then 5750. FIIs could react negatively to the fall in the Rupee yesterday, on a tactical basis, and then look to buy again near 5750.
Commodities are generally quiet.
Gold (1383.70) is quiet. As we've been saying for a while now, expect sideways trading between 1365-1425 for some days. Silver (21.87) trades below 22 and is in an overall decline while below 23.00.
Brent (103.83) is also quiet. Expect a rise towards 106 overall. The Brent-Nymex Spread (8) is dropping again instead of moving up and could head down towards 6. This could keep the Brent capped a bit, though.
As expected The Euro (1.3278) has bounced well from Support in the 1.3175-65 region. We targegt 1.34 on the upside. The Pound (1.5597) has also recovered a bit, but the upmove towards might slow from here as people find the EUR-GBP (0.8515) a little more attractive. The Aussie (0.9434) continues to be in a funk and we target 0.9229 in some days.
Dollar-Yen (97.98) had bounced to as high as 99.28 yesterday but is falling back again. While below 0.99, it may test 0.97 on the downside over today-tomorrow.
The Dollar Index (81.69) has a crucial Support near 81.35. The big question is whether this Support will hold/ break. Deeper Support seen at 80.1950.
The R-currencies continue to weaken. The Rupee (58.15) might see 58.45-55-65 today. There is some hope of correction from there as the Dollar is highly Overbought now. Some marginal profit-taking on Dollar-Longs is being seen on the Rand (10.1633) and the Ringgitt (3.1270).
The US 10-Yr (2.20%) trades just below a crucial trendline Resistance. A dip to 2.00% could be seen if that holds. Take a look at the first chart on the following page:
That could be crucial for the Rupee. The Indian 10-Yr GOI (7.29%) has been moving up a bit from a low of 7.12%. But, the Indo-US 10-Yr Spread (5.34%) is still falling. Should the US Yields dip back to 2.00%, it could produce a bit of a bounce in the Indo-US Spread, giving some relief to the Rupee.
The BOJ has just announced it will continue to buy Yen 50 trln of JGBS annually and has also left the Monetary Base target unchanged.
5:07 GMT or 10:37 IST BOJ Meeting
...Expected <0.10 % ...Previous <0.10 %
5:45 GMT or 11:15 IST IN Trade bal
...Previous -17.79 $ Bln
...Actual 1.0% ...Previous 0.90%
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