Monday March 15, 2010 - 03:40:09 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 15-Mar-2010 - 0338 GMT
The US Equities were up last week. The Dow (10624.69) was up 0.58% and the Nasdaq (2367.66) was up 1.78%. The Dow looks strong and may move towards 11000 in the days ahead.
The Asian Equities are in the Red today amid speculations that China may take more steps to cool its Economy. The Nikkei (10732.73) is down 0.17%. It closed above the Resistance near 10600 levels last week and may rise towards 11250 in the days ahead. The Shanghai (2989.749) is down 0.79% and has an important weekly Support near 2950-75 region, a close below this may render it bearish for the days ahead. The HangSeng (20996.56) is down 1.01%. The Sensex (17166.62) was up 0.77% last week and looks prepared to move towards the next Resistance level at 17500 in the days ahead.
Crude (80.82) has fallen and is now trading below 81. Though increase in retail sales data and the International Energy Agency (IEA) increasing the demand outlook for 2010 were positive for the market, the unexpected drop in consumer confidence data release and profit taking pulled down the price. Immediate Support is seen at 80 a break below which might pull it further down towards 78-77.50. Remember Crude has been ranged between 68-84 over the last few months.
Gold (1103.50) is continuing to trade lower and is holding on to the range 1100-50 which we have been mentioning for some time. A break below 1100 might see 1080 on the downside in the coming days. However, 1100 is a very crucial level to watch for as it is an important Trendline Support seen on the weekly as well as the daily candles. A break and a weekly close below 1100 might turn it little bearish going forward. To see the Trendline Support on the Gold candle chart click on the following link:
Decent start to the Dollar this week, with the Euro (1.3740) coming off from Friday's high near 1.3795 and Dollar-Yen (90.65) retaining its strength from last week. Expect further strength in the Dollar against both the Euro and the Yen this week. The Euro-Yen Cross (124.60) had risen to a high near 125.18 on Friday, but can fall 100 points today suggesting overall weakness for the Euro. Dollar-Swiss (1.0595) has bounced a bit from early morning lows near 1.0575, but might be vulnerable to further decline unless the SNB intervenes in the markets.
The Aussie (0.9138) has dipped a bit from Friday's high near 0.9194, but retains an overall uptrend that could test 0.9250. The Pound (1.5160) is likely to run up against Resistance at 1.5240 today after having bounced well last week. Could be a contrarion "buy on dips' trade with tight stops.
In Asia, the Sing Dollar (1.3968) has weakened a bit after strengthening to 1.3924 on Friday. Good chance, hereon, of it reversing most of the gains it has racked up in the last couple of weeks. USD-KRW trades near 1129.20, higher than last week's low near 1109.60. Outlook is unclear for this pair. Dollar-Rupee had closed at 45.43 and has equal chances of falling towards 44.85 or rising towards 46.05 this month.
The Dollar-Rupee market will be closed tomorrow on account of Gudi Padwa. The FOMC meeting being due tomorrow, there are chances the markets may be quiet today.
The 3M USD LIBOR was unchaged at 0.26%. The 2Y yield was flat at 0.95% whereas the 10Y was down 4bps to quote at 3.69%.
The important Central bank meetings scheduled for this week are the FOMC meet tomorrow (16-Mar-10) and the BOJ meeting on Wednesday (17-Mar-10).
13:00 GMT US Feb TICS (Net foreign purch of long-term Sec)
...Expected $ 50.3 Bln...Previous $ 63.3 Bln
13:15 GMT US Feb Industrial Production
...Expected 0.1%...Previous 0.9%
13:15 GMT US Feb Capacity Utilization
...Expected 72.7%...Previous 72.6%
EU Jan IND Prodn (MoM)
...Actual 1.7%...Previous 0.6%
Jan CA Labour Force
...Actual 20.9K...Previous 43.0K
US Feb Retail Sales
...Actual 0.3%...Previous 0.1%
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