Friday November 8, 2013 - 03:39:58 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Nov-2013 -0338 GMT
Dow (15593.98) fell sharply on speculation that the US govt. would cut stimulus earlier than expected amid higher GDP data released yesterday. It has been rejected from the upper boundary of the 1000 points range Doe has been trading inside for the last six months.A break below 15500 can drag it down towards 15200. Nasdaq (3857.33, -1.90%) has fallen sharply and seems bearish for now.
Dax (9081.03) has come off from a high of 9193.98, as the ECB cut rates yesterday by 25bp. While in an overall uptrend, we may expect the index to rise up to 9300 after some consolidation as some selling is seen at the higher levels.
Asia-Pac is overall down. Nikkei (14104.73) is steadily falling targeting 14000 for now while maintaining the uptrend. Shanghai (2122.09) has also fallen and is targeting support near 2100 from where it may rise upwards.
Nifty (6187.25) came off after registering a high of 6288.95 yesterday. This signals a bearish movement. Major support is around 6150-60 below which we would expect 6100.
Gold (1307.80, -0.05%) has dipped but is in an overall sideways consolidation. Near term support coming up near 1290 and 1275. Silver (21.68, +0.08%) is ranged and may continue to consolidate sideways.
Copper (3.2570) has risen but is testing trend resistance on the daily at current levels. It may continue to range in the 3.2-3.35 region in the near term.
Brent (103.44, -0.02%) has come off below 104, from a high of 103.53. Its move is likely to be bearish but can find support at 100-101. Nymex WTI(94.52) has hit a major support area 92.70-93 and now may try to move up gradually.
Euro (1.3412) crashed to 1.33 after the ECB cut its interest rate by 25 BPS but bounced from the lows sharply. The earlier support of 1.3450-60 has turned into a strong resistance now and can push the price lower once again to 1.33 or even lower. Another rally towards 1.3510-20 is possible if Euro manages to overcome 1.3450-60. Dollar Index (80.88) shot up to 81.46 before coming down. It has resistance at 81.15 and support at 80.60.
Dollar-Yen (98.23) got rejected from the main resistance area of 99.80-90. Yen is undergoing a lot of contraction in a triangular pattern which has a tendency to consume a lot of time. It can trade inside the range of 97-100 for a few days more. EURJPY (131.69) tested the October low last night after the ECB news. It is trying to bounce from that area but must go above 132.10 to make any sustainable rally. Otherwise it can fall again.
Pound (1.6094) dropped to 1.6008 in line with our expectation and sharply bounced back. It must cross the strong resistance area around 1.6120 to rally more. Support is at 1.6065-70. Aussie (0.9463) has bounced from our support zone of 0.9420 and holding that, can try to rally further. But the confirmation of initial strength will come only above 0.9490.
USDINR (62.41) can open with a gap up today near 62.70 as the aftermath of the ECB announcement. The resistance for now is at 63 and support is at 62.40. The rally above 62 is expected to continue
US 10Yr (2.60%) has dipped further even after a good GDP data (2.80%). The US NFP, Unemployment and Personal Income data will be coming out today. We have to wait and see how the markets react to these data.
Japan 10Yr (0.58%) dipped. The volatility in Yen can bring the yields down. The US10-Y10 yeild differential has fallen to 2.01%.
The ECB and BOE came out with their Interest rates policies yesterday. The German 10Yr (1.68%) dipped after the ECB cut its refinancing rate by 25bp to 0.25%. There was also a corresponding fall in the Euro (1.3410) to 1.3295. Interest rates all over Europe took a hit after the unexpected rate cut. Even after no change in the BOE policy rates the UK 10Yr (2.67%) has dipped.
Indian 10Yr GOI (8.85%) has moved further up we may see it go up to 8.90%.
9:30 GMT or 15:00 IST UK Trade Balance
...Expected -9.10 £ (Bln) ...Previous -9.63 £ (Bln)
13:30 GMT or 19:00 IST US NFP
...Expected 126.00 K ...Previous 148 K
13:30 GMT or 19:00 IST US Unemployment Rate
...Expected 7.30 % ...Previous 7.20 %
13:30 GMT or 19:00 IST US Personal Income
...Expected 0.30 % ...Previous 0.40 %
13:30 GMT or 19:00 IST US PCE Price Index M/M
...Expected 0.30 % ...Previous 0.30 %
13:30 GMT or 19:00 IST CA Labour Force
...Expected 15.30 K ...Previous 11.90 K
Australia Labour Force
...Actual 1.06 K ...Previous 3.35 K
...Actual 0.50% ...Previous 0.50%
...Actual 0.25% ...Previous 0.50%
...Actual 2.80% ...Previous 2.50%
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