Tuesday November 12, 2013 - 03:51:36 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 12-Nov-2013 -0349 GMT
Dow (15783.10 +21.32) hit 15800 level once again and increased the probability of breaking the resistance area of 15800-850. Above that, we can get a move to 16100-200. No weakness will seen as long as the index remains above the major support of 15500. Nasdaq (3919.79, +0.56) has come up to a resistance at current levels. We may see it targeting 4000 if the resistance breaks.
Dax (9107.86, +29.58) reached our target resistance of 9120 and corrected a bit. It will get weak on a break of 9080 and 9060. It must stay above these support areas to keep the rally going.
Nikkei (14494.39, +224.55) is showing a lot of bullish strength. Now it has to stay above 14550-60 to reach the major resistance of 14800. Shanghai (2115.00, +5.53) has bounced from the support near 2110. The 21-MA support on the weekly is also holding and we may see it going up to 2150.
Nifty (6078.80, -61.95) is in a confirmed downtrend in both short and intermediate term. The last hope for the bulls lies around the support of 6030. If it doesn’t bounce from that area, then we could expect another few hundred points’ cut. Resistance is at 6140-50.
Gold (1279.60, -1.50) has dipped further and is trading just above the crucial support at 1275. We may see it targeting 1250-1225 if this bearishness continues. Silver (21.23, -0.06) has remained stable and is targeting the near term support at 21.
Copper (3.2455, -0.0140) continues to be ranged in the 3.20-3.35 region.
Nymex WTI (94.87, -0.27) and Brent (106.20, -0.20) remained stable. While we can see WTI ranged at 94-96 for the next few days, Brent has moved up from the resistance at 106 and can now target 108.
Euro (1.3393) has started to contract in the range of 1.3318-1.3438. As long as this contraction goes on, no major move could be expected. This range will be broken above 1.3450 or below 1.33. Dollar Index (81.20) dropped to 81.05 but bounced to 81.24 in line with our expectation that all dips would be bought as long as 80.80 holds. Weakness will be seen only below 80.80.
Dollar-Yen (99.54) is very close to the most important resistance zone of 99.70-80. A sustained move above this can take Yen to 100.60-90 and then to 104. EURJPY (133.31) reached our target of 133.20 and is very close touching 133.50. For further strength to reach 135-135.50, it has to cross 133.55-85.
Pound (1.5970) is taking support from our support zone of 1.5950-80 currently but still any rally or bounce is expected to be sold into and the fall to continue. Any corrective rally could target 1.6020-30 at most where the sellers could return again.
Aussie (0.9331) outlook remains unchanged. The trend remains very weak till it stays below 0.9420-30. Major support area is in 0.9280-85.
USDINR (63.24) can open near 63.30-40 today. A bit of weakness is seen in The Dollar compared to the Emerging market currencies today, which is quite natural after this big a rally. That strength could influence the USDINR a bit today. USDINR will remain strong above 63.45 and first sign of weakness will come only below 63.
The US Treasury market was closed yesterday. Whether the bullishness in yields continues will have to be seen when the US market opens today. Japan 10Yr (0.58%) has remained stable. The US10-Y10 yield differential has widened to 2.16%.
The German 10Yr (1.75%) has remained stable near the 1.74%-1.76% levels during the past week. The G2-US2 yield differential has come up to a support and can widen from here. The UK 10Yr (2.80%) has come up to our target of 2.80%. The UK CPI data is to be out today and how the yields react will have to be watched.
Indian 10Yr GOI (8.96%) has dipped a bit from yesterday after the Trade Deficit figures came out at $ 10.56 Billion. A further movement will depend on the CPI and IIP data today.
9:30 GMT or 15:00 IST UK CPI Y/Y
...Expected 2.50 % ...Previous 2.70 %
12:00 GMT or 17:30 IST IN IIP
...Previous - 0.60 %
12:00 GMT or 17:30 IST IN CPI
...Previous - 9.84
Chattisgarh Elections - - -
N Trade bal
...Actual -10.56 $ Bln ...Previous -6.70 $ Bln
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