Tuesday July 23, 2013 - 03:44:59 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 23-Jul-2013 -0341 GMT
Equities are up but face some danger of near-term correction/ consolidation.
The Dow (15545.55) ended absolutely flat yesterday. We are bullish for 15900, but if it doesn't move up soon, it could dip towards 15300. Existing Home Sales are reported to have fallen yesterday.
Asia-Pac is all up handsomely, including the Shanghai (2034, +1.46%) and Nikkei (14770, +0.77%). The Shanghai has bounced back after a dip to 1975 yesterday, but faces a crucial Resistance near current levels from its overall downtrend. The Nikkei is continuing to remain above 14400, at least for now, but faces Resistance near 15000.
The Nifty (6031.80) is maintaining Support at 6000 for now, but needs to move higher to avoid a corrective dip towards 5900.
Commodities, especially Gold, are strong all around.
Brent (108.29) has held well to its Support at 108 levels. We remain bullish for 109-110 while 108 holds.
Gold (1336.22) has again risen sharply since yesterday. Further rise to 1350-1375 can be expected this week.
Silver (20.45) is at a crucial level. Could target 21.00-50. Confirmation in the form of a break above 20.60 is needed.
Copper (3.1895) is in an uptrend in the near term and is rising steadily towards the 3.20 mark. It will be crucial to see whether it breaks the 3.20-25 mark or it succumbs.
Dollar is weaker against the Major currencies. It could strengthen against the Emerging currencies.
The Euro (1.3200) contiues to rise targeting 1.3270, in line with expectations. The Pound (1.5370) is also trading higher, with chances of surpassing 1.54 now to target 1.55. The recovery in the Pound from the low of 1.4813 (09-June) is very significant.
Dollar-Yen (99.57) trades below 100 again. It has been consolidating sideways between 98-102 for the last 4 weeks. It could slowly dip a bit towards 98.90 in the near term. The Euro-Yen Cross (131.46) is in a good uptrend and this suggests that Dollar-Yen may see only shallow dips.
The Aussie (0.9275) has already met our week-target. We have to see whether it can rise past crucial Resistance at 0.9300 or not. If so it can target 0.9365.
Dollar-Rupee close higher near 59.72 yesterday. The Dollar shows signs of wanting to bounce against the other R-currencies also. This could work to pull Dollar-Rupee higher as well. But, we have to see what the RBI does to try and keep the market down.
The US 10-Yr (2.48%) trades steady below 2.50%. We have to be ready to see at least a small bounce towards 2.52%. Although Existing Home Sales (5080K) dipped yesterday, it remains in an overall uptrend. The market will look forward to the New Home Sales tomorrow.
The India 10-Yr (8.13%) is again trading at the level seen on 16-July. The market seems to be wanting another 25bp rise in yields.
The German-US 2-Yr Spread (-0.20%) is slowly moving up in favour of the Euro.
No major data release today.
US Existing Home Sales
...Actual 5.08 K...Previous 5.14 K
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