Thursday August 8, 2013 - 03:35:01 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Aug-2013 -0333 GMT
Equities are down globally.
The Dow (15470.67, -0.31) has fallen further and may now see a fall towards 15000. Fed officials are increasingly vocal about chances of tapering starting in September.
Nikkei (13927.99, +0.75) had fallen sharply yesterday on Yen strength, but it is up a bit today. While long term support at 13600 holds, it may rise towards 14900.
Shanghai (2041.91, -0.24%) has dipped below 2050. But Support at 2025 is still is holding well. While so, we may still hope to see a rise past 2050.
Nifty (5519.10) had hit its lowest yesterday since June, a victim of Rupee weaknes. It desperately needs to bounce today to avoid further loss of confidence. But, it is unlikely to find Buyers, with most Indices down globally.
Gold (1293) has bounced back on Dollar weakness, but should have Resistance coming up at 1300 and then at 1325. Note that the Dollar Index is coming close to long-term Supports. See Currencies section below. Silver (19.80) continues to be ranged sideways.
Nymex WTI (104.67) is tracing a Double Top on the Daily with potential of fall towards 102.55. Brent (107.66) has broken below 108, the earlier range support of range 108-110. A break below 107.50-25 would confirm top is in place and open chances of fall towards 104 going forward.
Copper (3.2440) has done well to rise past 3.20. This greatly reduces the downward pressure on the industial metal.
Majors mostly stronger against the Dollar. The Dollar Index (81.31) is down from 82.49 on 02-Aug, but has Support coming up at 81.07.
Euro (1.3330) is stronger, testing range Resistance now. Break above this, if seen, will test 200-week MA at 1.3399. The Pound (1.5489) did rise to 1.55 (high was 1.5531) as suggested yesterday. Strong/ important Resistance seen in the 1.5535-45 region. Dollar-Yen (96.64) has come down to test the 96.50 Support as suggested yesterday. A low of 96.31 has been seen, just above the 8-mth MA at 96.22. Given proximity of Support ay 81.07 on the Dollar Index, all the G-3 currencies above could see some profit-taking by end-of-week tomorrow.
That said, the Yen could get an even greater Yield advantage in the coming days. See Interest Rates section below.
The Aussie (0.9016) has moved up a bit more and could be on its way to test 0.91, on further Short-covering. Remember, though, that 0.91 is a very crucial Resistance and the Aussie has at least some chances of falling again from there.
The R-currencies (Rouble, Rand, Real, Ringgit, Rupee) remain weak. Dollar-Rupee (61.30) close higher yesterday and has chances of rising further towards 61.60 on the charts. The market is closed tomorrow for Eid. It would be wrong for the RBI to try and sell the Dollar down at the end of the day today. But, no one knows what the RBI will do these days.
The US-Japan 10-Yr (1.83%) trades a little lower than yesterday's 1.86%, pulled down by dip in the US 10Yr (2.59%). Long-term Resistance holding, as mentioned yesterday. The German-US 2-Yr (-0.14%) is also dipping from the -0.12% Resistance mentioned earlier. So, it could be that both Dollar-Yen and Euro-Dollar may dip going forward.
The Germany-Japan 2-Yr Spread (0.06%) continues to inch up, though, but could be vulnerable to a corrective fall in the coming days. Basically, Japanese Yields could harden a bit ahead of the Japanese GDP data on Monday.
The Indian 10-Yr (8.18%) has come off from 8.25% the day before, but possibly needs to move higher still to stem Rupee weakness.
Australia Labour Force
...Expected 6.20 K ...Previous 9.3 K ...Actual -10.2K
...Actual 48.4 ...Previous 55.30
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