Tuesday January 21, 2014 - 03:24:39 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 21-Jan-2014 -0323 GMT
Dow (16458.56, +0.25%) bounced from 16375 as expected. The broader uptrend will be reasserted on a break above 16530, in which case we can target 16800-17600 as a lot of projections converge there. Initial sign of weakness comes only below 16050-100.
Dax (9715.90, -0.28%) broke above the 3 week old range of 9350-9650 and quickly reached our 9750-9800 levels to consolidate there. Next target would be 9950 above 9750-9800. Support is at 9350 and 9200 levels.
Nikkei (15830.79, +1.21%) has corrected from our 16000-150 resistance area and could fall further towards 15150-200 unless it manages to climb above 16150 again. Watch immediate Support at 15400 for confirmation either way.
Shanghai (2011.16, +1.00%) remains in a strong downtrend targeting 1975-50 while below 2030. Longer term target could be as low as 1750-1850 unless short-covering is seen at 1950. Only above 2030, bulls can take it to 2055-60.
Nifty (6303.95, +0.68%) bounces back strongly to test the old supply zone of 6290-6315 as CNX IT recovers all the loss incurred on Friday. If the bulls manage to break 6345-60 this time after this correction, the strength of any rally towards 6500-6600 will be much stronger. We may discard this bullish scenario below 6200.
Gold (1252.915) has been rising due to increase in physical demand and may target long term resistance near 1275-1280 if levels above 1250 sustains. While the bears are still hovering around, we cannot negate a fall to 1235.18 and lower just now. However a break above 1280 could be very bullish.
Silver (20.22) continues to remain stable unable to rise above the crucial resistance at 20.50. A rise above 20.5-20.65 is needed to ensure a rise towards 21.5 and maybe higher. But while below 20.5 we may continue to see some ranged movements. Overall the trend remains down but it could be reversed if prices rise above 22.95-23.
Copper (3.3420) continues to consolidate in the 3.30-3.37 region since the last two weeks targeting resistance near 3.40. A break above 3.40 may take the prices higher towards 3.50.
Brent (106.35) remains stable after fluctuating in the 105.8-106.6 regions. While above 105, we could see a rise towards 107-108 and even 110 in the longer run. But we cannot negate a fall to 104.8-105 just now.
Nymex WTI (94.16) has bounced from support at 93.5 and may consolidate in the 93-95 regions while below 95. It is now trading above the support zone of 93-93.5 which may take it higher towards 96 in the coming weeks.
Dollar Index (81.17) faces the major supply zone of 81.50 now as it remains in an uptrend above 80.30-50. From a broader perspective, the Dollar index keeps trading in a contracting range within 79-81.50 for nearly 3 months now and only a break of that range would give any real direction.
Euro (1.3536) has hit a major trendline at 1.3508 and the RSI shows the same. If 5 waves are finished at that low, a bounce may be expected towards 1.36-1.37, but selling pressure may come at the higher levels. Below 1.35, the drop may extend to 1.333-1.34. The trend remains firmly down.
Dollar-Yen (104.57) is bounced back from our support zone of 103.65-104 to reassert the longer term uptrend. The rally may target 107 now above 105.40-60.
The Euro-Yen Cross (141.73) has bounced from our target support zone of 140.30-50. It may reach 142-142.15 and 143-143.30 above that. The drop may extend below 140 towards 138.50-140.
The Pound (1.6425) is in the 5th week of sideways trade between 1.66 and 1.63. Good Support at 1.63 now. Can rise again towards 1.6600 within overall uptrend from 1.4800 (Jul-13). Where it will go after that will have to be seen.
The Aussie (0.8834) has bounced from our major long term support at 0.87-0.8720 and if it can stay above 0.89 now, the bounce can extend to 0.9050-0.91.
Dollar Rupee (61.62) may open flat to negative today near 61.55-60. It keeps trading below our resistance zone of 61.70-75 and could fall again towards 61.30-40 unless it breaks above this supply zone. A successful break above 61.70-75 would extend the rally to 61.95-62.10.
The US 10Yr (2.84%) remained stable before the release of the Home Sales data and the FOMC meeting later this month. The 5Yr (1.64%) and the 30Yr (3.76%) also remained stable. No major movement is expected in the yields for now.
The German 10Yr (1.74%) also remained stable. The German-US 2Yr spread (-0.22%) fell further towards the support zone of -28%-0.30%. The UK 10Yr (2.83%) remained unchanged before the release of the BOE Minutes today.
The Japan 10Yr (0.66%) remained unchanged before the BOJ Meeting that started today. Any monetary decision regarding the change in the key interest rates will have a huge impact in the bond market. It needs to be watched.
The Indian 10Yr GOI yield (8.52%) dropped the most as the Central Bank starts to increase liquidity in the markets ahead of the RBI Meeting by buying debts through open market operations.
No major data release today.
No major data release yesterday.
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