Wednesday September 25, 2013 - 03:40:20 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Sep-2013 -0336 GMT
US stocks fell as the US Consumer Confidence slumped to a four month low. Dow (15334.59, -66.79) is down and can fall to 15200-100. Nasdaq (3768.25, +2.97) is up marginally but still vulnerable to a fall to 3700. The Dax (8664.60, +29.31) managed to close slightly higher even though the increase in German IFO yesterday was less than expected. The Dax charts show a support at 8600. It can go up to 8800 from here.
Asia-Pac is marginally up apart from the Nikkei (14700.19, -32.42) which has fallen below the short term support at 14730. A fall to 14400 can be avoided it it bounces back from here. Else, we can see a further fall to 14400, especially as Dollar-Yen is a little bearish. Shanghai (2212.41, +6.68) is up marginally. It can rise to 2250 to face the resistance there. We note that it has not been subject to as strong a profit-taking as is being seen in the Dow.
Nifty (5892.45, +2.70) closed marginally higher yesterday but could be vulnerable to a decline today tracking the fall in the Dow.
Gold (1324.30, +0.61%) has risen on anticiaption of increase in physical demand as India heads into Diwali season. However, the outlook is uncertain while resistance at 1375 holds. Silver (21.77, +0.83%) has dipped a bit and is in an overall down trend. It could test support at 21. For now it is likely to remain ranged between 23 and 21.
Copper (3.2605) has risen slightly. It is caught between near-term Support at 3.24 and long-term Resistance at 3.32
We were bearish on Crude yesterday, but it has moved up. We may have to review our outlook. Nymex WTI (103.29 ) may have chances of rising to 108-109 as it is testing crucial trend and Moving Average supports at current levels as seen from the weekly line charts. Brent (108.77) is up marginally consolidating between 107-110 for the last 3 days. It can move sideways for a few more days with a near term support coming up at 107 which if holds can help it to rise to 111-112.
Euro (1.3476) has dipped a bit and may test 1.34 on the downside. We don't rule out 1.33 either as the broad 1.27-35 rage continues to hold. Dollar Index (80.551) trades weak overall, but has long-term (200-week MA) Support at 79.80.
Pound (1.5995) continues to dip as Resistance at 1.6071 holds well for now. A test of 1.59, overall uptrend channel Support is possible. Dollar Yen (98.65) has dipped further and could test 98.00 on the downside.
Aussie (0.9386) has fallen breaking support near 0.94. It may consolidate for sometime now. The big-picture Double Bottom can give it a decent Support at 0.93.
The R-Currencies are a bit weaker than yesterday. The Dollar-Ringitt (3.222) is retracing its recent downfall and can rise to test 3.24. Rupee (62.7525) closed higher yesterday but may find some Resistance at 63.15. Break thereof, if seen, can pull the market higher towards 63.75.
The US 10-Yr (2.66%) is coming down towards 2.60%, in line with expectation. Although Case Shiller was up 12.4% Y/y, Consumer Confidence has fallen to 79.7. The overall trend of US Consumer Confidence remains negative. We see danger of further erosion of confidence going forward as recent interest rate increases bite.
The dip in US Yields is rubbing off on the other G-3 yields now. The 10-Yr yields for Germany (1.92%), Japan (0.68%) and UK (2.73%) have all dipped in the last few days. This is one reason why the Euro (1.3476) and the Pound (1.5992) are stalling at Resistances at 1.35 and 1.60 respectively. On the other hand, the Yen (98.61) has been strengthening because the US-Japan 10-Yr Spread (1.98%) is coming down faster, tracking the fall in the US 10-Yr.
India 10-Yr GOI (8.89%) inched up further yesterday. The Indo-US 10-Yr Spread (6.20%) can test 6.25-30% before dipping a bit.
12:30 GMT or 18:00 IST US Durable Goods Orders
...Expected 0.00 %...Previous -7.40 %
14:00 GMT or 19:30 IST US New Home Sales
...Expected 422 K ...Previous 394 K
US Case Schiller
...Actual 12.40 % ...Previous 12.07 %
US Cons Conf
...Actual 79.7 ...Previous 81.8
GER IFO Business Climate
...Actual 107.70 ...Previous 107.60
GER IFO Business Situations
...Actual 111.40 ...Previous 112.00
GER IFO Business Expectations
...Actual 104.20 ...Previous 103.30
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