Tuesday June 25, 2013 - 03:35:27 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Jun-2013 -0333 GMT
Divergent moves in various global stock indices being seen within an overall decline. Some indices can fall further, but some could bounce.
The Dow (14659.56, -0.94%, -139.84) closed lower yesterday. Support at 14500-400 needs to hold now to prevent a deeper decline. The DAX (7692.45) closed just below crucial level of 7700. A bounce seems possible from here.
The Shanghai (1945.34, -0.91%) trades further lower. We see it testing 1850 by next week and then bouncing from there. The other Asia-Pac indices are mixed, ranging from -0.53% (New Zealand) to +0.63% (Singapore). The Nikkei (13147.14, +0.65%) is up a bit today. It has been consolidating sideways through June but remains vulnerable to a fall below 13000 in July.
The Nifty (5590.25) had closed lower yesterday. It can bounce today as there is a crucial (and maybe strong) trend Support near current levels.
Commodities in general are trading weak. Brent has bounced. So some respite can come in there.
Gold (1285) trades at a super-crucial Support level. A break hereof can push the market down towards 1150. We remain bearish overall. Copper (3.0130) looks vulnerable as it tries to break below 3.05. The Chinese slow down is hurting and there can be chances of seeing 2.90, maybe lower.
Brent (101.12) has bounced off the Support at 100, as we suggested yesterday. Gold should remain weak, though.
Some chances of currency markets cooling off for a couple of days now. Watch US Durable Goods, New Home Sales and Consumer Confidence today.
The Euro (1.3119) is seeing minor consolidation. Remains vulnerable to a fall towards 1.30 and 1.29. This is despite a small bounce in the 10-Yr German-US Spread from -0.91% to -0.73%. The German IFO came in indecisive yesterday and is curiously poised now. Don't know whether it indicates a slowdown or recovery going forward. Take a look at
The Pound (1.5437) bounced well yesterday as the Support at 1.5375 held. A deeper decline has been avoided for now, but there is Resistance at 1.5475 now. The Aussie (0.9226) has also bounced a bit after dipping to 0.9175 yesterday. Dollar-Yen (97.67) had risen well last week, but looks indecisive and consolidative now.
The R-currencies have strengthened a bit overnight as the US 10-Yr has come off a bit. Dollar-Rupee (59.6850) could also cool off towards 59.50-25 today. Below that there would be chances of seeing 58.75 as well.
The US 10Yr (2.54%) has come off from its high of 2.66%. Our Resistance at 2.70-75% is holding for now. A dip to 2.40% would cool off the markets a goodish bit. But a decline below 2.20% is needed to prevent a flare up to 2.90% later in July. Keep an eye on this one. The US NFP on 5th July is going to be a big one.
12:30 GMT or 18:00 IST US Durable Goods Orders
...Expected 3.00 % ...Previous 3.46 %
13:00 GMT or 18:30 IST US Case Schiller
...Expected 10.60 % ...Previous 10.90 %
14:00 GMT or 19:30 IST US New Home Sales
...Expected 462 K ...Previous 454 K
14:00 GMT or 19:30 IST US Cons Conf
...Expected 75.60 ...Previous 76.20
GER IFO Business Climate
...Actual 105.90 ...Previous 105.70
GER IFO Business Situations
...Actual 109.40 ...Previous 110.00
GER IFO Business Expectations
...Actual 102.50 ...Previous 101.60
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