Friday October 25, 2013 - 04:01:44 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Oct -2013 -0359 GMT
The Occident-Oriental divide continues. The Western hemisphere is moving up while the Eastern hemisphere is trading lower.
Dow (15509.21, +95.88) has resumed its rise towards 15800 for now. Nasdaq (3928.96, +21.89) has risen and is targeting 4000. Dax (8980.63, +60.77) also moved up past earlier resistance near 8965-75 and can rise further to 9100-9200.
The Asia-Pac is down. Nikkei (14325.85, -160.56) has fallen further and we can see it targetting 14100-14000. Shanghai (2157.70, -6.62) has dipped further falling below the support on the daily line chart. It can target 2100-2050 if it falls below 2150. Nifty (6164.35, -14.00) is testing resistance at current levels on the weekly line charts. We may see it falling to 6000 if the resistance holds. But a break below 6100 is needed to confirm.
Gold (1344.40) continues to target 1400. Silver (22.67) too looks bullish overall targeting 24. Copper (3.2680) could bounce back to 3.30 if the Support at 3.25 continues to hold.
Nymex WTI (97.27) and Brent (107.15) are stable. Brent is testing support at current levels on the daily line chart and can move up to 108-109. WTI is testing support on the weekly charts and may go up to 100 if support holds.
Euro (1.3794) has Resistance at current levels and in the 1.385-1.40 region which can push back the currency towards 1.34 in the medium term. Dollar Index (79.208) has fallen and may continue to decline further towards 78.9 from where it may bounce.
Pound (1.6199) is caught between resistance and support at 1.625 and 1.610 respectively. If the resistance breaks it may target 1.64 in the mid-term. Dollar Yen (97.292) has fallen sharply and may test support near 97.0 which if holds may take it up towards 99. The pair may now consolidate for sometime in the 96.95-99 region before deciding its further move. Else 96-100 is a broader range in which it can trqade
Aussie (0.9617) has declined sharply as the 200-day MA has held well and is testing a support at current levels. But it could be vulnerable to a fall towards 0.95.
R-currencies are overall strong except the USDBRL (2.2025) which has sharply risen. Dollar Rupee (61.47) had been quite stable. We still expect a range of 61.00-61.70 for today.
The US 10Yr (2.51%) is slightly higher within an overall downtrend that targets 2.25%. US Mortgage rates are also moving lower.
The German-US 10Yr Spread (-0.75%) has started falling already. As mentioned earlier, we have a strong Resistance near -0.65%. Even the 2Yr Spread (-0.13%) is moving sideways rather than sharply higher. So, the Euro might find it difficult to break past the 1.3850-4000 Resistance region. The US-Japan 10Yr spread (1.90%) remains bearish, targeting 1.80% even as the 10Yr JGB (0.61%) seems headed towards 0.50%.
Chinese Repo rates (7-day 4.80%) continue to move up. News suggests that liquidity may remain tight for some time but violent spikes may not be seen. Indian 10Yr GOI (8.59%) continues to trade above 8.55% although the Indo-US Spread (6.08%) has dipped from 6.14% to 6.08%.
8:00 GMT or 13:30 IST GER IFO Business Climate
...Expected 108.00 ...Previous 107.70
8:00 GMT or 13:30 IST GER IFO Business Situations
...Expected 111.60 ...Previous 111.40 -
8:00 GMT or 13:30 IST GER IFO Business Expectations
...Expected 104.50 ...Previous 104.20 -
8:30 GMT or 14:00 IST UK GDP
...Expected 0.80 % ...Previous 0.69 %
US Trade Balance
...Actual -38.8 $ Bln ...Previous -38.6 $ Bln
US New Home Sales
...Expected 425 K ...Previous 421 K
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