Thursday July 11, 2013 - 03:36:25 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Jul-2013 -0333 GMT
Equities are stable/ strong. Nikkei could fall.
The Dow (15291.66, -0.06%, -8.68) is down marginally but bullish overall for a test of 15500. Asia-Pac is largely in the green, especially the Shanghai (2037, +29, +1.43%). The Shanghai faces some Resistance near current levels but we may say the worst is over in case of a rise past 2050.
The Nikkei (14393, -0.17%) is down marginally on Yen strength as the Dollar loses some Yield support. We could see a corrective fall in the Nikkei as it is hugely Overbought in the near term now.
Expect the Nifty (5816.70) to rise towards 5900 as a positive reaction to the FOMC Minutes/ Bernanke's "highly accomodative" comment.
Gold (1284.96) is up sharply on Dollar losses and could rise to test downtrend Resistance near 1325. Silver (19.94) has moved up alongwith Gold but faces crucial Resistance near current levels now. If it breaks, some more rise towards 21 could be seen.
Copper (3.1295) has risen well also, and this is good news for the world as it lesser fear of de-growth. We can see a further rise towards 3.25.
Brent (108.20) maintains it strength on continued Egypt tensions. We are looking for a rise towards 110-112.
Its a matter of market positioning really. The reaction to the FOMC Minutes/ Bernanke's comments overnight, that is. The Euro (1.3115) has risen sharply the Support at 1.2745 has held well on the Euro as the 2-Yr Germany-USA Yield Spread (-0.24%) has moved up a bit from the Support at -0.29% mentioned yesterday. The Euro could rise towards 1.3315, maybe even 1.34.
Dollar-Yen (98.58) has declined sharply as the Support at 100.80 has broken. We've been warning about an impending end to its upmove. The Pound (1.5110) has also risen well and could be headed up to 1.5250 in a few days. The Aussie (0.9270) has broken past the 0.9225 resistance level on continued short-covering.
Dollar-Rupee (59.66) could well fall towards 59.50 today. It is Oversold on the Near-term charts now but see further strength towards 59.30-58.50 in the coming days/ weeks.
The US 10-Yr (2.59%) has fallen sharply as the Resistance at 2.75% has continued to hold well, in line with expectation and in reaction to the FOMC/ Bernanke comments. Some more dip towards 2.55% is possible.
The BOJ has left the monetary expansion amount unchanged at JPY 60-70 trln.
The German-US 2-Yr Spread (-0.24%) has moved up from -0.29%. The USA-Japan 10-Yr Spread (1.75%) could come down from Resistance just above current levels, strengthening the Yen.
5:07 GMT or 10:37 IST BOJ Meeting
...Expected <0.10 % ...Previous <0.10 %
0:30 GMT or 6:00 IST Australia Labour Force
...Expected 0.30 K ...Previous 1.06 K
No major data release yesterday.
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