Tuesday December 3, 2013 - 03:26:22 GMT
Share This Story
FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 03-Dec-2013 -0325 GMT
Equities remain flat to negative overall.
The Dow (16008.71, -0.48%) weakened after consolidating for the last 4 days and the bulls would be a bit worried a bit in at the inability to sustain at the higher levels of 16100-200. It has found support at 15975-90 zone for now but must capitalize on it today itself by rising again. Otherwise, it can fall further to the next major support area in 15830.
The Dax (9401.96, -0.04%) is not showing any sign of weakness yet. The next target resistance levels come at 9450 and 9600. Support comes at 9250-80.
The Asia-Pac region is trading mixed. The Shanghai (2207.67, +0.01%) has not managed to break above the major resistance area of 2235-45. A positive break-out would be very bullish but we'd want to see the break happen before actually becoming bullish. The Nikkei (15737.47, +0.53%) has seen mild profit-taking on its way to 16000. As long as it stays above 15500-650, the bullish momentum remains intact.
The Nifty (6217.85, +0.68%) is struggling at the major resistance levels and that validates our stance of cautious bullishness despite the trend being up. Further strength is expected only above 6230 and then 6270. Supports to be watched come at 6160-70 and 6125. We would not like to commit ourselves till next Monday, when the market would open after the Assembly Elections results.
Gold (1220.86) and Silver (19.196) have fallen sharply and may fall further towards 1180 and 18.5 respectively. Near term bearishness prevails while the overall trend remains downward.
Copper (3.1755) has fallen sharply. Support coming up near 3.15 which if holds could take it back towards 3.25. While below 3.25 it is likely to be bearish.
Brent (111.44) fluctuated in the 109-112 region yesterday but is finding difficult to rise above 112.5. We may expect some consolidation in the near term. Nymex WTI (94.12) has risen sharply from the trend support and is targeting 96-97 levels.
Euro (1.3534) remains weak after Monday’s sharp fall. It can try to recover a bit now, but as long as it stays below 1.3620, the bears may take the Euro to 1.3460-80 levels or lower. The bearish momentum will remain strong below 1.3560-80.
Dollar Index (80.51) broke above 80.65 yesterday to reach our target level of 81. Now above 81.10-15, it may continue rising to reach 81.30-50. Supports exist at 80.80-85.
Dollar Yen (103.11) is showing signs of bullish acceleration as the duration of consolidation is getting smaller the higher it rallies. It is very close now to the final resistance zone of 103.50-75 and we must watch the price action closely there to gauge further strength. Supports come at 102.20 and 101.90.
EURJPY (139.54) made a weekly and monthly close at a new 5 year high, signaling its intent to go towards 144. It is consolidating in the narrow range of 139-139.70 for the last 3 sessions now. Staying above the support of 138.30, it may begin rising again.
Pound (1.6353) is correcting a bit after a huge rally. But any real weakness will be signaled only on a move below 1.6230. Till then all the dips could be bought. The long term targets of 1.67-1.70 remain intact.
Aussie (0.9081) remains stuck in the range of 90.50-92 and after getting rejected from the higher end of this range, it has returned to the lower end. The next meaningful move would come beyond this range only.
Dollar Rupee (62.31) may open flat to negative near 62.25-30.The decreasing CAD as reported last evening may bring a little bit of selling in the opening but as long as the demand continues to emerge in the lower end of the range of 62-64, the dips may be bought. A rise above 62.55-70 would confirm further rise towards 63.25-45. Only below 61.85, we would reconsider our stance. For now, we maintain the buy in dips and sell on rallies strategy.
The US 10Yr (2.80%) saw another rise to our target mentioned yesterday after the ISM Manufacturing data came out stronger than expected. We may see it going up to 2.90%-3.00%.
The German 10Yr (1.74%) has also seen a rise bringing the US-German 10Yr yield differential to -1.10%. The Euro (1.3534) has weakened further. The Japanese 10Yr (0.61%) has moved up a bit but is still stable. The US-Japan 10Yr spread (2.18%) has widened and the Yen (103.11) has also weakened further.
The Indian 10Yr (8.74%) has remained stable we expect it to trade at these levels for the next few days before falling to 8.60%.
3:30 GMT or 9:00 IST RBA Meeting
...Expected 2.50 % ...Previous 2.50 %
...Previous 53.20 ...Actual 47.70
IN Manufacturing PMI
...Previous 49.60 ...Actual51.30
...Expected 55.10 ...Previous 54.20 ...Actual56.50
...Expected 51.50 ...Previous 51.40 ...Actual 51.60
...Expected 56.00 ...Previous 56.50 ...Actual58.40
US Manufacturing ISM
...Expected 55.20 ...Previous 56.40 ...Actual 57.3
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."