Thursday July 4, 2013 - 03:36:15 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 04-Jul-2013 -0333 GMT
Dow (14988.55, +56.14, +0.38%) managed to close marginally higher in an overall sideways consolidation between 14800-15200. Longer term outlook is unclear, depends a lot on the NFP tomorrow. The market is closed today.
Asia-Pac is mixed, tilted a little towards the positive. Shanghai (1983, -0.57%) and Nikkei (14009, -0.33%) trade slightly lower. There is a danger that the Shanghai could see one more dip towards 1800 given that it is struggling to rise above 2000. The Nikkei has good Resistance near 14100 and could dip towards 13600 next week.
The Nifty (5770.90) disappointed by closing below 5800 yesterday. Further dip to 5700 could be seen. Has good Support there, though. Needs to hold to prevent fresh decline towards 5500.
Commodities are a little firm/ firmer. Dip in Dollar helping a bit.
WTI Crude (101.15) trades strong but has Resistance near 103.00. Might not break that in a hurry. Brent (105.35) can rise further towards 107, though, on greater sensitivity to the Eyptian situation. Such a rise would help the Brent-WTI Spread (current 4.2, up from 3.0) move up further.
Gold (1254) is managing to remain above 1250 in the near term and can move up to 1275 unless it falls immediately. Silver (19.67) is putting up a good show but has 50% chance of either rising towards 21 or falling towards 18.
Copper (3.1545) is consolidating well above 3.10. It may move up towards 3.25 if it manages to rise above 3.20.
The Dollar could give back some gains against the Europeans at least. The Dollar Index (83.25) has Resistance at 84.
The Euro (1.2993) saw a low near 1.2923 yesterday but has bounced from there. We see good chances of a rise towards 1.3375 in coming weeks. The market will be keen to hear what Draghi has to say today. The Pound (1.5252) has seen a good bounce from a low near 1.5136. Further rise towards 1.5375 possible.
Dollar-Yen (99.81) surprised by falling back from 100.85 yesterday. But, the uptrend remains in place while for now with Support at 99.25-00. So, there's a bit on confusion on this pair. Decline continues in the Aussie (0.9090) which saw a low near 0.9036 yesterday. Further decline towards 0.8950 cannot be ruled out. Deeper target would be 0.8870, the 100-mth MA.
The R-currencies are weak, of course, but there could Resistance near current levels on the USD-RUR (33.1675) and the USD-BRL (2.2630). The USD-ZAR (10.0790) looks like it can rise further. The Sing Dollar looks weak, the Malay Ringgitt not so much. The Egyptian Pound (7.0288) is relatively steady despite the coup in Egypt.
Dollar-Rupee (60.22) has a crucial Resistance near 60.76, the previous high. We have to see whether that will break or not. The market could be quiet through the day today. Support seen in the 59.9075 region.
The US 10-Yr (2.50%) has moved up from levels near 2.47% the day before. As we've mentioned before, there is good Support at 2.40% and there is still a decent chance of seeing 2.65% on the upside. The ADP Employment data was strong yesterday. The market awaits the official Unemployment data tomorrow. Expectations are for a dip to 7.5% from 7.6% earlier.
The US is closed today.
All eyes on the BOE and the ECB today. The EU Q1 Final GDP release is also due today. Expectation is -0.2%. The market will want to hear Draghi's assesment of the future.
9:00 GMT or 14:30 IST EU GDP
...Expected -0.20 % ...Previous -0.20 %
11:00 GMT or 16:30 IST BOE Mtg
...Expected 0.50 % ...Previous 0.50 %
11:45 GMT or 17:15 IST ECB Meeting
...Expected 0.50 % ...Previous 0.50 %
Australia Trade Balance
...Actual 0.67 $Bln ...Previous 0.17 $Bln
EU Retail Sales
...Actual 1.03 % ...Previous -0.52 %
US ADP Emp
...Actual 188K ...Previous 134K
US Trade Balance
...Actual -45.03 $ Bln ...Previous -40.15 $ Bln
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