Monday December 23, 2013 - 03:34:18 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 23-Dec-2013 -0333 GMT
Dow (16221.14, +0.26%) is showing the intent to reach 16700-800, the next possible target zone as it closed above the 13 year old resistance line of 16200. Right now, a bit of correction may be on the cards before further Santa rally.
Dax (9400.18, +0.69%) has managed to end the week above 6225 and the weekly candle signals a move towards a new high near 9600. Weakness will come only below 9190.Keep an eye on the two gaps around 9350 and 9190-9260.
Nikkei (15870.42, +0.07%) is closed today. It looks uncannily similar to Dow when it is noted that both the indices have been pushed back from 13 year old resistances. Going above 15650, it is facing the strongest resistance now, the 13 & 18 year old supply zone of 16000-100 above which a multi-month bull market will be signaled.
Shanghai (2089.20, +0.21%) reached our target level of 2080 this morning and trying to bounce now. It will face resistance at 2095 and 2115 now. This is the first pause in its downtrend after the false breakout above 2250 levels. Unless 2165-75 is taken out, the bears will continue to dominate.
Nifty (6274.25, +1.74%) had a sharp rally to 6284 on Friday. As a perfect 3-wave move was completed at 6284, it must sustain above 6284 now on the back of positive global cues, to continue that rally or it would run the risk of a fast fall again towards 6210 or even lower. Above 6284, it would face resistance at 6305-6325. Support comes at old resistance area of 6220-30.
Gold (1202.56) has shown some correction after its sharp fall as lower prices have boosted some purchases. But bearishness cannot be negated. While below 1225, we may see some consolidation before a further fall towards 1185.
Silver (19.34) is stable and may range sideways for some time. A fall towards support in the 19.0-18.5 regions is still a possibility in the near term.
Copper (3.3070) has managed to move up and now if this rise continues we may expect a break above 3.35. Note that there is a crucial resistance zone near 3.39-3.40.
Brent (111.83) has risen further and is testing trend resistance near current levels. If this holds we may see a fall towards 109 but if Brent manages to break 112-112.5, it may rise higher towards 114.
Nymex WTI (99.27) has risen sharply breaking 99 and if this continues we may see a rise towards 100.95-101. Overall it is in a near term uptrend.
Dollar Index (80.52) held nicely above 80.40-50 till now but must break above the next supply zone of 80.80-95 to reach 81.50 and more. Support remains at 80.40-50.
Resistance at 1.3825-50 has held well for the Euro (1.3675) and brought it crashing down after the Fed statement. It must hold on to the support level of 1.36-1.3620 to keep any bullish hopes alive, otherwise it may drop to 1.3525. It came back from our resistance at 1.37-1.3710 on Friday above which 1.3750 would be the strongest hurdle.
Dollar-Yen (104.04) has closed above the range of 101.50-104 at a new 5-year high. It signals a rise towards 105.50 and even 109 in the next few weeks. Any weakness will emerge only below 102.50.
The Euro-Yen Cross (142.30) remained stuck in the range of 140.90-142.90. It must break beyond this range to get a directional move and participants should keep in a wait and watch mode till then.
The Pound (1.6349) got tremendous buying pressure from the 1.62-1.63 area exactly in line with our expectation and hit a new 2 year high at 1.6484. As long as it stays above 1.62, more rallies may emerge towards 1.65, above which the next hurdle comes at 1.6740-50.
The Aussie (0.8926) finished the week at 0.8914, considerably off its lows at 0.8820 showing the lack of bearish momentum near the lower levels. But it must cross and sustain above 0.8975 to trigger any hope for a possible move towards 0.91-0.92.
Dollar Rupee (62.04) may open flat to negative near 61.90-95 today. It has created a Turning Top candle with a very small body of 10 paisa, in the weekly time frame, indicating indecision. A lot of possibilities are there but for the immediate bullish scenario, buying must emerge from 61.90-62. Below 61.90, the important levels to watch would be 61.60-70. Resistance remains at 62.45-50. Stay cautious and watchful.
The US 10Yr (2.89%) is down. This shows that the resistance near 2.95% is holding well. It can now consolidate in the range of 2.85%-3.00%. The 5Yr (1.68%) is moving up sharply while the 30Yr (3.82%) continues to fall. The 30Yr is coming towards a support near 3.75% and we may see it rising from here.
The German 10Yr (1.87%) remained unchanged. The German – US 10Yr differential (-1.02%) is up and can go up to -1.00%. The German – US 2Yr spread (-0.16%) is just at the support zone near -0.18%. The Japan 10Yr (0.69%) is up and is consolidating in the range of 0.65%-0.70% for now. The US-Japan 10Yr spread (2.20%) is down a bit but it can still target 2.30%.
The Indian 10Yr GOI yield (8.79%) rose slightly. We expect it to remain in a range of 8.75%-9.00% for the next few days.
13:30 GMT or 19:00 IST US Personal Income
... Previous -0.08
13:30 GMT or 19:00 IST US PCE Price Index M/M
...Previous - 0.28 %
13:30 GMT or 19:00 IST CA GDP
...Previous - 0.30 %
UK Cons Conf
...Expected -11 ...Previous -12 ...Actual -13
...Expected 0.80 % ...Previous 0.78 % ...Actual 0.78%
...Expected 3.60 % ...Previous 3.60 % ...Actual 4.10%
CA Inflation Y/Y
...Previous 0.70 % ...Actual 0.90 %
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