Tuesday November 26, 2013 - 03:36:46 GMT
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KSHITIJ.COM - Morning Briefing!
Equities are strong on balance, but with a tinge of caution.
The Nikkei (15497, -0.78%, -122) is seeing some profit-taking today after rising 10% since 7th Nov. We had set a target of 16200, but the May-13 high near 15942 could be an interim Resistance. The current uptrend persists while above 15200.
The rest of Asia-Pac is mixed, ranging from -0.19% (New Zealand) to +0.42% (Taiwan). The Shanghai (2184, -0.08%) continues to hesitate/ consolidate below the crucial 2200-25 Resistance. It had seen profit-taking yesterday as well. A break below 2175 could be bearish.
The Dow (16072.54, +0.05%) crept nearer to the crucial 16100 Resistance yesterday, but has not broken through yet. The danger of a profit-taking decline towards 15500 will be there unless there is a clear break above 16100, in which case a rise to 16500 is the alternative scenario. The market is at the cusp of a break either side. Maybe today's Consumer Confidence and Housing Starts could be the trigger. The Dax (9299.95, +0.88%) continues to post new highs in the meanwhile.
The Nifty (6115.35) has risen strongly back into the 6000-6200 range. It may move up towards the upper end of this range today.
Gold (1252.56) has bounced back from 1227.6. While above 1250, we may expect a rise towards 1265-1280.
Silver (20.237) has shown movements similar to Gold. While below 20.5 there are chances of a fall towards support near 18.5.
Copper (3.2195) has made a bearish candle on the daily. But overall it is in a near term uptrend and may rise steadily towards 3.30.
Brent (110.95) fluctuated in the broad 108.05-111.56 levels touching the near term support and resistance respectively. While the resistance near 111.5 holds, we could see a consolidative movement in the 108-111 region.
Nymex WTI (94.36) rebounded from the trend support near 93 after speculation that the Crude supplies have shrunk in the US. Near term movement to be seen in the 93-96 region as said earlier. Currently WTI is trading near support at 13-day MA.
Euro (1.3535) has changed little on a day to day basis. Now a move above 1.3555-60 would activate a bullish pattern with a target of 1.3620 and higher. But failure to go above 1.3560 could pull it to 1.3460-70. The bias remains neutral at this moment. Dollar Index (80.81) is contracting its range and a break from this range is required to get a clear direction. The broader range is in 80.50-81.30 and the smaller range has turned out to be in 80.65-81.05.
Dollar Yen (101.45) is going through a normal correction after a week long rally. If small, then the fall could end near 110.10-20 or 100.70-80 and if it turns out to be a deeper correction, it can to go to 100.10-20. In any case, the uptrend remains intact. Resistance is at 101.70-90. EURJPY (137.26) is consolidating near the strong resistance zone of 138.35-75. This zone remains the defining level for the next major direction.
Pound (1.6153) has failed a make a new year high yet and got rejected. It needs a weekly closing above 1.6260-1.63 to trigger a major rally. On the other hand, the sellers at a that level would try their utmost to push it down from this zone.
Aussie (0.9181) once again challenged 0.92 and kept the bearish momentum intact for further fall towards 0.91.
Dollar Rupee (62.50) may open near 62.35-40 today. The upside remains capped to 63.10-25 for now but the narrow inside range can extend to the downside to 62-62.25. Any signal for strength would come only above 62.70-85. The strategy of buying the dips and selling the rallies continue till 61.50.
US Yields are testing important Supports today. They could rise sharply if the Supports hold. Else a break could mark the loss of yield advantage for the Dollar going forward.
The US 10Yr (2.72%) has come off a bit more yesterday. Watch crucial Support at 2.70% today. That needs to hold to keep Taper fears in focus. A break below 2.70% (not preferred, but if seen) could spell a Top for the 10Yr. The 30Yr (3.81%) has Support at 3.75%.
The German-US 10Yr Spread has moved up a bit more to -1.0% from -1.02%. There could be a change in the overall downtrend in case there is a rise past -0.975%. This needs to be watched carefully over the next couple of days. The US-Japan 10Yr spread (2.10%) has come down to test its crucial Support. We have to see if this holds today.
Unexpectedly, the Indian 10Yr (8.75%) has seen a sharp fall from near 9.09% and the Indo-US 10Yr Spread (5.99%) has also seen a sharp decline from 6.35% on hopes that lifting of Iran sanctions will bring in cheaper Crude and help bring down Inflation. We have to see if this fall sustains today or not.
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