Monday July 8, 2013 - 03:40:30 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Jul-2013 -0337 GMT
Even though the Dow was up Friday, Equities globally could see a tough week ahead.
The Dow (15135.84, +0.98%, +147.29) was up sharply, but Asia-Pac is largely in the red. Shanghai (1971, -1.79%) is down quite a bit. It is vulnerable to a fresh decline towards 1800. Even the Dow has Resistance near 15200, the upper end of the 14800-15200 range. And, although the Nikkei (14365, +0.39%) trades higher, it too could be vulnerable to a fall, despite weakness in the Yen.
The Nifty (5867.90) too has Resistance near current levels and is in some danger of dipping to 5700.
Commodity news is not good. Gold down, Crude up, Copper down.
Gold (1220.40) saw a sharp decline on Friday, victim to Dollar strength. Silver (18.83) has also declined. We were unsure of market direction on Friday and has said the market could go either way. But, Gold could see some Support coming up near 1200 now. Silver, which has been outperforming Gold for quite some time could be in danger of falling towards 16.
Brent (107.99) has risen well, past earlier resistance near 107. The skies seem to be open for a rise towards 115 now. Copper (3.0805) has fallen below 3.10 again. This is worrying. The last Support/ hope is 2.95 now. If that breaks also, we could be looking at a protracted decline.
The Dollar Index (84.51) has broken above earlier resistance at 84.23, strengthening more than we had anticipated.
The Euro (1.2824) broke below 1.29 on Friday, falling more than anticipated. The Range Support to look for now is 1.2750. That needs to hold, otherwise Euro will become weaker. The Pound (1.4870) has broken below 1.5050 and could fall towards 1.4830 and 1.4725.
Dollar-Yen (101.30) rose strongly on Friday, reasserting its uptrend, and may well move up to 103.40. The Aussie (0.9055). We continue to target 0.89 on the downside.
Dollar-Rupee (60.22) may rise in line with all-round Dollar strength. Support seen at 60.00-59.70. The R-currencies are all weak only, but the USDRUB (Rouble, 33.32) has some Resistance near current levels. The Real looks weak, of course. While the outlook for the Rand is unclear in the near term, it looks weak in the medium term.
The US 10-Yr (2.72%) is trading just below crucial Resistance at 2.75%. If that breaks, we will see a further rise towards 3.00%. If it holds, it will help cool off the other markets also. This continues to be a super-crucial variable.
We need to see if the Fed has something to say to bring interest rates a bit lower. In the absence of that, the strong NFP data on Friday makes it difficult for people to bet against Fed tapering.
No major data release today.
...Actual 0.50% ...Previous 0.50%
CA Labour Force
...Actual-4.00 K ...Previous 95.00 K
...Actual 195 K ...Previous K
...Actual55.30 ..Previous 63.1
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