Thursday August 1, 2013 - 03:44:26 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Aug-2013 -0341 GMT
Most Indices are close to crucial long-term Supports. They could surprise with a rise if the Supports hold through till end of week tomorrow.
The Dow (15499.54, -0.14%) is seeing the craziest sideways movement in a long time. Market totally unsure if it wants to rise or fall. With FOMC out of the way, it will wait for the NFP tomorrow. Crucial Support at 15400 still holds. Can still move up to 16000 if and while that holds. See 15000 in case 15400 breaks.
The Dax (8275.97) continues to consolidate above Support at 8200. It could be seen rising towards 8500 while that holds.
Nikkei (13817.08, +1.09%) is up today from yesterday's low of 13645.61. Long-term Support at 13400 holding well for now. Might be able to avoid a Double Top if it continues to hold.
Shanghai (2021.07, +1.2%) is also up, close to the crucial Resistance at 2025 that needs to be broken to bring in order to bring in some Buying interest.
The Nifty (5742.00) has risen from its low of 5675.75 yesterday just above our target of 5650. Continue to watch Support at 5650. Going to be crucial.
Mixed moves Commodities. Outlook is unclear. Only Silver is clearly bearish.
Brent (107.97) rose yesterday instead of falling. It has surprised us for the last 2 days. Outlook unclear now. Could still see 110 on the upside. Danger of 105 also there. Nymex WTI (105.34) more bullish targeting 107.
Copper (3.13) has bounced from a low of 3.04. Could range sideways between 3.05-15 for a few days. needs to decide whether to break below 3.05 and 3.00 or not. Would be disastrous on the long-term charts.
Silver (19.70) continues to be bearish towards 18, held down by a strong channel resistance. Gold (1324.81) still has Resistance near 1325, but may also be ranged sideways. Outlook unclear.
Huge volatility between 1.3206-3344 yesterday in the Euro (1.3279). Suggests people unsure of trend now. We see chances of fall towards 1.31 in coming weeks while below 1.3354.
The Pound (1.5164) saw a low of 1.5124 in line with our forecast of 1.5135. Medium chart indecisive, good for broad range trade between 1.50-55. Requires patience and guts to buy low/ sell high. Market likely to be quiet ahead of the BOE Meeting, which is expected to keep QE in place.
Dollar-Yen (98.28) continues to be quiet, but is holding above 97.50. May continue to move sideways between 97.50-98.50 today. Longer term bias remains on the downside while below 98.50. The Aussie (0.8969) has broken below 0.9000 on slow growth and prospects of lower interest rates. Heightened chances of further decline towards 0.8880-8750, latter being the 100-month MA.
Brazilian Real (2.2764) and Rouble (33.00) can weaken further. The Rand (9.8517) is weak, but immediate trend outlook is unclear. Ringgitt (3.2450) and Sing Dollar (1.2710) trade weak. The NDF market quotes Rupee near 60.63 compared to the Onshore close near 60.37/40 yesterday. We have to see whether the Support at 60.20-59.90 holds or not.
The Fed threw no further light on tapering yesterday apart from saying they feared disinflation. With the next FOMC only on 18-Sep, the market is going to play "Will it / Won't it (taper from September" for the next 6 weeks. Expect a lot of to-ing and fro-ing of opinion. Expect position squaring and ranged trading.
The US 10-Yr (2.59%) has come off from an intra-day high near 2.70% last evening. With Resistance at 2.75% holding for now, there are still chances of a long-term Double Top which could still ease fears in many markets. But, there could still be chances of 2.75% in the near term, depending on the US NFP data tomorrow. Situation is fluid.
All eyes on Draghi now. Will he cut rates to fuel the faint hopes of recovery? Most people expect him to hold steady. The German-US 2-Yr Spread (-0.16%) is steady but has room to rise towards -0.12%.
The Indo-US 10-Yr Spread (5.58%) may still need to rise towards 6.13% to attract foreign investors.
23:20 GMT or 4:50 IST AU PMI
...Actual 42.00 ...Previous 49.60
4:30 GMT or 10:00 IST IN PMI
8:00 GMT or 13:30 IST EU PMI
...Expected 50.70 ...Previous 50.00
8:30 GMT or 14:00 IST UK PMI
...Expected 52.8 ...Previous 52.50
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
14:00 GMT or 19:30 IST US Manufacturing ISM
...Expected 52.10 ...Previous 50.90
...Actual 50.7 ...Previous 52.30
US FOMC Meeting
...Actual <0.25 % ...Previous <0.25 %
...Actual 12.10 % ...Previous 12.10 %
US ADP Emp
...Actual 200 K ...Previous 198 K
... Actual 1.70% ...Previous 1.10%
...Actual 0.20% ...Previous 0.10 %
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