Wednesday September 11, 2013 - 03:38:05 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Sep-2013 -0335 GMT
Good showing on Equities globally over the last few days/ couple of weeks, fuelled by relief on Syria (take a bow, Putin) and good Industrial Production and Retail Sales data from China yesterday. The rise can continue for the rest of this week. But, there is important medium/ long term Resistance coming up some of the indices, as can be seen on the Weekly Candle and Line charts in our Graph Gallery. We could see profit-taking coming in soon.
For instance, Shanghai (2243, +0.22%) has Resistance near current levels on the Weekly Candles. The Nasdaq (3729, +0.62%) has Resistance near current levels on the 3-day and Weekly Line charts. Please see our Graph Gallery at http://www.kshitij.com/graphs.shtml
That said, the DAX and the Nikkei (14514, +0.55%) have some more room on the upside than the others. Yesterday's Chinese data has been good, but what is to be seen is how the market will balance the Taper which is fully priced in vis-a-vis chances of US growth stalling a bit.
The Nifty (5896.75) is likely to test and see profit-taking at important Resistance at 6000.
Commodities are down overall as Syria agrees to surrender its chemical weapons easing concerns of a military attack. Silver, Copper and Brent face resistance at the current levels.
Gold (1363.20) is trading just above the support at 1350 levels. If this support breaks we may see prices coming down to 1300.
Silver (23.0950) is down. The charts show a resistance at current levels which may push the prices down to 21-22.
Copper (3.2770) is up consolidating for now between 3.20-3.30. It faces an immediate resistance at 3.25-3.30 which may push the prices down to 3.20.
Nymex WTI (106.92) has fallen. The charts show a support at 106. We may see prices go up to 108-109 if the support holds. Brent (111.18) has fallen below the resistance at 112. There is a support at 110-111 which may help prices to rise to 112-113.
Non-Yen Currencies have surprised us by rising for the last few days. The Dollar Index (81.773) has dipped and might target 81 now.
Euro (1.3274) has strengthened over the last few days reacting a rise in European Equities. It can get into a mixed period between 1.31-34 now. The Pound (1.5732) has risen well over the past few weeks but has crucial Resistance near current levels on a trendline coming down from the 2007 high of 2.1160 on the Weekly Candles. Further range Resistance seen at 1.5800.
Dollar-Yen (100.34) has risen above 100 and looks bullish enough to test 102.00-50, as the Nikkei can rise further. Aussie (0.9287) is rising well on short-covering and can move up to and past 0.94.
The R-Currencies have gained overall except the Rand, which has weakened on a wider current account deficit. Malaysian Ringgitt (3.273) has strengthened and may continue to move towards 3.20. The Brazilian Real (2.2847) has also strengthened whereas the Rand (9.993) has weakened a bit.
Rupee (63.85) gained strongly yesterday and might test 63.00 even though Dollar Rupee is oversold in the near term.
South Africa succesfully floated a $2 bln bond yesterday. Russia sold a EUR 0.75 bln Euro denominated sovereign bond and is also selling $4.5 bln in Dollar bonds. This is good news for Emerging Market bonds. India is not doing sovereign bonds, but is looking to raise money through NRI deposits and bank borrowings.
India's 10-Yr GOI (8.53%) is stabilising between 8.50-70%. The Indo-US 10-Yr Spread (5.60%) too is stabilising between 5.50-5.75%.
The US 10-Yr (2.97%) trades close to the 3.0% Resistance. The "taper" is fully priced in and yields will possibly come off a bit now that US data is turning soft. The German-US yield spreads are moving down, against the Euro, but the Euro itself is reacting more to the rise in European Equities.
8:30 GMT or 14:00 IST UK Unemp
...Expected 7.80 % ...Previous 7.80 %
IN Trade Bal
...Actual -10.9 $ Bln ...Previous -12.27 $ Bln
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