Friday December 12, 2014 - 03:18:35 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 12-Dec-2014 -0318 GMT
Dow (17,596.34, +0.36%) retested 17,700 levels before giving up all the gains. 17,500 is now a crucial support, a break below would trigger a larger slide. For now, the target at 17,200 remains valid.
Nikkei (17,474.90, +1.26%) has bounce from the psychologically important 17,000 mark. and is now testing the 17,500 levels. Above 17,500, the targets are 17,800. 17,680 would be a tough resistance on the way up.
Shanghai (2,946.30, +0.70%) has bounced from 2900 but some more down trend is left before the rally resumes. The immediate target is the retest of 2,900 and on the break of 2,900. The targets 2,850 and 2,800 mentioned earlier remain valid.
Dax (9,862.53, +0.64%) remained choppy but failed to cross above 9,900. The target of 9,620 remains valid. A break below 9,600 levels could trigger a larger downtrend. However, the hopes of ECB’s QE are likely support the market.
Nifty (8,292.90, -0.79%) saw a very weak close. We are likely to see the downtrend continue. The next targets on horizon are 8,200 and 8,145. As repeated, Nifty is very much vulnerable to profit-book by FIIs. With few high liquidity sessions remaining for 2014, the selling pressure would remain.
Silver (17.092) has been held well below the crucial resistance near 17.29 and while this holds we may see some sideways consolidation in the 16.5-17.3 regions
Gold (1225.46) has also been hit by the resistance near 1237 and it may trade lower for some sessions now before rising any further.
Brent (63.20) and Nymex WTI (59.22) have fallen further down and the bears are very strong for now. No near term indication of any reversal is seen. Near term remains bearish.
Copper (2.9190) remains stable for now with no major movement.
Euro (1.2397) failed yet again to cross 1.2500. A break below 1.2360-1.2340 would initiate another leg of downtrend targeting 1.2250 and 1.2200.
Pound-Dollar's (1.5684) is continuing in its November range. The bearish formations in EURGBP (0.7885) are helping keep the Pound stable.
Dollar-Yen (118.89) rose to 119.50 but could not clear the Fibonacci resistances. For the day, we expect it to trade below 119.60 resistances. The long term trend remains bullish, however in short term the trend is weak.
Dollar-RUPEE (62.33) moved to test the pivot levels of 62.35. A break above would be bullish for Dollar-Rupee with targets in 63+ regions. We will need to watch the price action closely at this pivot. The short term Dollar-exposures could be sold at 62.35.
Aussie-Dollar (0.8260) made a new low at 0.8213. This trend of new lows is likely to continue withAussie expected to weaken substantially in 2015.
The Russian Central bank raised rates to 10.5% from 9.5% yesterday in an attempt to halt the falling Rouble hit by the falling Oil prices. Russian 10Yr yield (12.280%) fell from 12.785% while USDRUB (54.95) continues to extend its upward movement.
The Italian bond yields continue to rise while the German yields on the other hand remained stable at lower rates.
The 5Yr (1.590%) has risen while the 10Yr (2.1581%) has fallen. Overall the US yields are falling and may continue in the near term.
Indian 10-Yr GOI (7.8665%) is falling in line with our expectations and may see levels of 7.80% next week before rising from there while the market expects some restraint to continue in India's fiscal and monetary policy.
5:30 GMT or 11:00 IST CN Retail Sales
...Expected 11.5 % ...Previous 11.5 %
5:30 GMT or 11:00 IST CN Ind Prodn
...Expected 7.6 % ...Previous 7.7 %
10:00 GMT or 15:30 IST EU IND Prodn (MoM)
...Expected 0.2 % ...Previous 0.6 %
12:00 GMT or 17:30 IST IN IIP
...Previous 2.5 %
12:00 GMT or 17:30 IST IN CPI
13:30 GMT or 19:00 IST US PPI ex Food & Energy (MoM)
...Expected 0.10 % ...Previous 0.1 %
Australia Labour Force
...Expected 15.20 K ...Previous 13.7 K ...Actual 42.7 K
...Expected <0.25 % ...Previous <0.25 % ...Actual <0.25 %
US Retail Sales (MoM)
...Expected 0.4 % ...Previous 0.5 % ...Actual 0.7 %
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