Monday June 17, 2013 - 03:38:56 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-Jun-2013 -0335 GM
Divergent moves being seen in the major Equity markets. Its not one big roaring bull market.
The Dow (15070.18, -105.90) fell back from 15200 on Friday, unable to rise further. A corrective dip to 14800-600 seems likely. The Nikkei (12812, +126) is up a goodish bit, as the correction of the Oversold condition continues. As mentioned on Friday, we see chances of 13200 before a fresh fall towards 11750 starts.
The Shanghai (2151, -11.00, -0.51%) is struggling unable to hold up. Seems to be suffering from lower growth expectations.
The Nifty (5808.40) had seen a good bounce on Friday, but faces crucial Resistance near current levels. A rise past 5825 is needed to break the current downtrend. Else we could still see a test of 5650 on the downside.
Metals are ranged/ lower. Crude is higher. Divergence in commodities also.
Gold (1390.60) is quiet as expected. The earlier range of 1365-1425 has been narrowed to either 1370-1419 or to 1355-1405, depending on point of view. The longer term trend remains bearish. Silver (22.01) remains bearish as well while below 23.00 and we continue to target 20 in the coming weeks.
Copper (3.2245) has consolidated last week but remains bearish overall for a dip to crucial Support in the 3.10-3.05 region. Brent (105.75) has risen to 106 as we'd been warning for a while now. The way the charts are shaping up, a further rise towards 108 looks likely now.
The Dollar Index (80.63) has seen a sharp fall from 84.50 in the last 4 weeks. Crucial Support coming up in the 80.20-80.00 region now. Could bounce from there on short-covering.
The Euro (1.3329) saw a high near 1.3390 last week. Expect good Resistance at 1.3430 for this week and chances of dip towards 1.3200 again. The Euro-Yen Cross (126.07) trades below 21-week MA (126.79). While below that, there is danger of a fall towards 123.70. Dollar-Yen (94.59) could consolidate a bit this week after 4 weeks of relentless fall, but remains vulnerable to a further decline towards 92.30.
The Pound (1.5708) is holding onto gains and may well test crucial Resistance at 1.5800. The EURGBP Cross (0.8484) has broken below crucial level of 0.8500 and this suggests the Pound can remain relatively strong in the near term.
The Aussie (0.9608) had bounced well from Oversold conditions last week and could rise further towards 0.9700. Should that happen, the danger of a fall towards 0.9200 would be reduced a bit as the market may then try to remain above 0.9550. This is going to be an interesting pair to watch.
Dollar-Rupee (57.52) has crucial Support at 57.25 for this week. It could bounce back to 58.25 while that holds. In case the Support at 57.25 breaks, then we can hope for 56.65. Most of the other R-currencies are in a similar position. They strengthened a bit last week, but could weaken again this week. With the Dollar Index approachig a Support, the chances of further strength in the R-currencies seems less.
RBI Meeting today. People are scared to ask for a rate cut now given Rupee weakness. SBI continues to push for a CRR cut. Maybe the RBI will oblige?
FOMC meeting results on Wednesday. The US 10-Yr (2.14%) seems to be coming off from the 2.25% Resistance region. A further dip to 2.00% would be welcome. Maybe the FOMC will cool the markets? But Retail Sales last week was very good. So, its a dicey situation out there. Keep positions light and options open.
9:00 GMT or 14:30 IST EU Trade Bal
...Previous 22.90 EUR Bln
...Actual 4.70 %...Previous 4.89 %
EU CPI (YoY)
...Actual 1.40 % ...Previous 1.20 %
US PPI ex Food & Energy (MoM)
...Actual 0.05 % ...Previous 0.11 %
US Current Account Balance
...Actual -106.00 $ Bln ...Previous -110.40 $ Bln
US TICS (Net foreign purch of long-term Sec)
...Actual -37.30 $ Bln ...Previous - -13.53 $ Bln
US Industrial Production
...Actual 0.00 % ...Previous -0.60 %
US Capacity Utilization
...Actual 77.60 % ...Previous77.80 %
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