Thursday June 27, 2013 - 03:49:02 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 27-Jun-2013 -0345 GMT
Equities see a bit of respite from selling. Let's see what the market does to the Nifty.
The downward revision in US Q1 GDP to 1.8% (from 2.4%) has helped the Dow (14910.14, +1.02%, +149.83) recover a bit. The Support at 14500 is holding and the Dow may well rise to 15000 and consolidate for a bit. BUT, we need to see a credible rise above 15000 to negate dangers of a deeper decline towards 14000 later on.
The Shanghai (1975, +1.19%) is also up a decent bit. It has avoided a fall to 1875, which is good. If it manages to close above 2000, that will be better.
All of Asia-Pac is in the green with decent bounces ranging from +0.44% to +2.85%. We have to see if the Nifty (5588.70) is the only Index to be sold today. We think Support at 5490 should hold. People are now talking about another 7-10% fall from here. We can't see that on the charts immediately. A 7% fall in the Nifty will have to be accompanied by a fall in the Dow towards 14000. For now, a break below 5475, if seen, can still find Support at 5400.
Gold (1242) trades lower and has bounced a bit from our target of 1225. Maybe we can see a bit of short-covering now. Silver (18.92) has Support near 18.36 now, yesterday's low and can see a bounce towards 19.50-20.00 in the coming days.
Brent (101.74) is seeing good Support at 100 (as suggested yesterday) for now. But, we need to see a good rise past 102-104 in order to move onto a higher plane. Till that happens, we could see Brent move sideways between 100-104. The Brent-WTI Spread (around 7) continues to fall. We see the WTI (95.97) trading sideways between 92-99 for a few week before falling towards 90.
The Euro (1.3035) trades lower, but should see buying in the 1.30-29 region, for a rise back towards 1.34. The Pound (1.5345) trades lower also. If it doesn't bounce from here, we could see a further fall towards 1.5150.
Dollar-Yen (97.77) is consolidating sideways and could move up a bit towards 100. The Aussie (0.9335) continues to see Short-covering, but needs to rise past 0.9400 in order to challenge the downtrend since 1.0582 (11-Apr).
Dollar-Rupee had made a record high of 60.76 yesterday before closing at 60.72. Sentiment is very bad. Some Elliot Wave analysts have projected 65.62 on the upside. We ourselves think 61.50-62.50 can cap the rise for now.
The US 10-Yr (2.54%) has eased a bit after the mark-down in the US Q1 GDP data. The strength of the Resistance at 2.64-75% increases. The German-US 10-Yr Spread (-0.77%) has moved up a bit in the last few days from levels near -0.90%. The German-US 2-Yr Spread (-0.21%) is moving down though, targeting -0.25%. It can pull the Euro down a little more towards 1.29, before there's a good bounce.
8:30 GMT or 14:00 IST UK GDP
...Expected 0.30 % ...Previous 0.30 %
9:00 GMT or 14:30 IST EU Biz Climate
...Expected 90.3 ...Previous 89.4
12:30 GMT or 18:00 IST US Personal Income
...Expected 0.20 % ...Previous 0.10 %
12:30 GMT or 18:00 IST US PCE Price Index M/M
...Expected 0.40 % ...Previous -0.18 %
...Actual 1.80 % ...Previous 2.40 %
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