Friday December 27, 2013 - 03:36:40 GMT
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Morning Briefing : 27-Dec-2013 -0335 GMT
Strong rise in the Dow (16479.88) yesterday, now aiming for Resistance near 16800. But, we'd be wary about profit-taking in the New Year, which is just round the corner. The Dax (9488.82) may try to break above Resistance at 9500 at the Open today, after the X'mas holidays.
The Nikkei (16123, -51.42, -0.32%) is seeing some profit-taking below important Resistance near 16200-300, after having moved up over the last couple of weeks. On the other hand, the Shanghai (2094, +21, +1%) is seeing a bit of short-covering today but remains bearish while below 2125. A rise past 2125 is needed to ease the bearishness. Most of the other Asia-Pac indices are mildly in the green.
The Nifty (6278.90) was stable yesterday and is looking mixed, unable to break above the 6300 Resistance so far. Weakness could start setting in if the market falls below 6200.
Gold (1211.15) is up just below the near term resistance. It is expected to move in the range of 1180-1225 for the next few days targeting 1250. Silver (19.83) is moving in the range of 20.0-18.5. If the long term support at 19 holds we may see a rise to 20.25-50.
Copper (3.3755) dipped a bit after a sharp rise on Tuesday. Is this the sign of a fresh bear signal or not needs to be seen as it has come below the lower limit our range of 3.40-3.45.
Brent (111.69) has dipped slightly. It is trading now in the support zone of 111-112 and we may see a rise to 114. Nymex WTI (99.50) has remained stable. It is currently in a channel uptrend trading near the support of the same. A ranged movement targeting the 100-Day MA resistance near 101 can be expected.
Dollar Index (80.37) has failed to break above 80.80-95 and confirm the strength. It has come below 80.45 as a sign of weakness and further drop may be seen below 80.20-30. Next support comes at 79.90-80.
We had mentioned that the Euro (1.3733) had managed to hold on to the support level of 1.36-1.3620 to keep the bullish hopes alive so far. Now that it has crossed above the 1.3710 levels, it must handle the strong resistance area of 1.3745-50 to sustain the strength.
Dollar-Yen (104.80) has reached in the sniffing distance of our first target of 105.50 as it made a new 5-year high again at 105.03. The next target of 109 remains open. Any sign of weakness will be seen only below 103.50 and 102.50.
The Euro-Yen Cross (144) broke out of the range of 140.90-142.90 on the upside and produced another fast move as expected. Next targets would be 144.60 and 149.
The Pound (1.6444) 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 1.65-1.6550, above which the next hurdle comes at 1.6740-50.
The Aussie (0.8885) was rejected from our resistance area around 0.8975-0.90 which it must cross and sustain above to trigger any hope for a possible move towards 0.91-0.92. Till then the downside remains open towards 0.87-0.8750.
Dollar Rupee (62.16) may open flat near 62.15 today on the back of conflicting cues as Dollar got weaker against most other currencies and equities also not showing any strength. Two scenarios possible now – for the bullish one, Dollar Rupee must trade above 62.16-20 to extend the rally towards 62.40-45. But if it fails to cross and stay above 62.16-20, we can see another move to 61.90-62 or lower towards 61.60-70.
The US 10Yr (2.98%) closed lower after touching our long held target of 3.00%. It has come up to a long term resistance at the current levels. A break above 3.00% and we may see the 10 Yr target 3.05% or even higher. What is surprising is that the 5Yr (1.73%) remained stable while the 30Yr (3.92%) saw a sharp rise.
Europe was closed yesterday. The German-US 10Yr differential (-1.10%) has fallen further. The Japanese 10 Yr (0.70%) is up slightly but expected to remain in the range of 0.65%-0.7%. The US-Japan 10Yr spread (2.27%) has remained stable.
The Indian 10Yr GOI yield (8.89%) is up but the range of 8.75%-9.00% is not expected to be broken for the next few days.
23:15 GMT or 4:45 IST JP PMI
...Previous 55.10 ...Actual 55.20
23:30 GMT or 5:00 IST JP Unemp
...Expected 3.90 % ...Previous 4.00 % ...Actual 4.00%
No major data release yesterday.
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