Friday October 4, 2013 - 03:45:18 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 04-Oct -2013 -0343 GMT
Stocks down globally as the US government shutdown enters Day 3. Dow (14996.48, -136.66) fell sharply below our target of 15000. It can now fall to 14900, but could present a good buying opportunity there, especially if the debt-ceiling increase is finally passed. Nasdaq (3774.34, -40.68) has also dipped. We see it moving towards our target of 3700 before it rises from there to 3850. Dax (8597.91, -31.51) has dipped below the support at 8630, but does not look very bearish.
Nikkei (14053.53, -103.72) has fallen sharply as the Yen strengthened against the Dollar. We still target 13800.
Nifty (5909.70, +129.65) closed higher yesterday and will now test crucial resistance at 5950 today. A break above 5950 may see Nifty rising to 6050. Or else we may see a fall back to 5700.
Gold (1315.40, -2.20) is stable near yesterday’s levels. It may target 1350 while above 1300. Silver (21.62, -0.17) has dipped. The resistance at the current levels may push the prices back to 21 and even lower.
Copper (3.2670, -0.0010) is ranged between 3.25-3.35. It can go up to 3.375 to test the resistance there.
Nymex WTI (103.15, -0.16) and Brent (108.80, -0.20) fell as the US shutdown threatens demand. Nymex WTI is testing crucial support at the current levels. If this holds we may see the prices going up to 106-107 or else a fall to 102 or maybe lower. We may see Brent consolidating between 107-110 for a few days.
Euro (1.36277) has risen and is targeting levels of 1.3650-3700. The US Dollar declined against the Yen (97.238) before the BOJ Meeting. Support is coming up at 96.62, the 200-day MA now.
Pound (1.6171) is strengthening after a sharp fall yesterday. It is in an overall uptrend and may rise towards resistance near 1.625 in the near term. Aussie (0.9434) gained on expectation that the RBA would refrain from cutting rates this year. It is caught between resistance at current level and support near 0.935. It may be ranged for sometime and then move upwards to 0.95-0.96
Brazilian Real (2.2070) has weakened a bit against the dollar on a credit downgrade by Moodys. Near term charts show a Double bottom formation which may take the pair upwards towards 2.22. Support coming up near 2.18. The Rupee (61.74) and the Rouble (32.14) have strengthened. Dollar-Rupee may trade a bit lower today ranged 61.20-61.60
BOJ has kept policy rates unchanged today and maintains JGB purchases at JPY 50 trln p.a.
Fear of US debt default have driven short-term US T-Bill rates higher. The 1-mth rose to 0.167%, from levels close to 0% earlier. But, John Boehner (US House Speaker) has asserted that the US will not default and is supposed to be working on proposals for a debt-ceiling increase.
In the meanwhile, the US 10-Yr (2.62%) continues to trend lower but may start finding Support near 2.55%. A corrective rise in yields is possible thereafter.
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