Forex Knowledge 27 jan 2014 currency Report.
EQUITIES
Equities worldwide have tumbled big on weak Chinese PMI (49.6, down from 50.5) and news of the Argentine Peso devaluation.
The Dow (15879.11,-1.96%) is close to the major support zone of 15500-700 below which we may see the fall extend to 14700-800.
The Nikkei (15009.04,-2.49%) finished the second bout of a 1000 points fall in the last 5 weeks to signal the end of the bull market for now. Below 14700-800, it may target 13700 and 13200.
Shanghai (2038.92, -0.75%) is among the better performers in this turmoil as it has already been in a major bear market for while now and has been beaten a lot already much before the other markets came under bear grip. That said, it needs to rise past 2150 to break the longer term downtrend it is trapped in.
The Dax (9392.02, -2.48%) joined the global rout to test the major support zone of 9300-9350 below which the fall is expected to extend to 9000 or even 8700.
The Nifty (6266.75, -1.24%) may open sharply lower matching steps with the global weakness. The repeated failure to break above 6345-60 is resulting now in a drop to the lower end of the broader range at 6130-40. All the rallies may face selling pressure now and below 6130-40, we may expect to see 5970 and 5920.
COMMODITIES
Gold (1274.796) continues its upward rally targeting 1280-1300 in the near term. A break above 1274.42 would take it higher else we may see movements within the 1250-1274.4 regions.
Silver (19.948) came off from resistance near 20.28 and is testing crucial resistance on the 3-day charts. It may consolidate within the 19.5-20.5 regions for some more time and may target support near 18.5-19 if it breaks below 19.5.
Copper (3.2645) came off sharply from resistance near 3.30 and is trading lower. We may see a fall to 3.25-3.20 while below 3.30.
Brent (107.52) has bounced back sharply from just above the support near 106. Currently testing the 200-day MA support, if this holds we may rise towards 108.5. While above 107, a rise towards 109-110 may be expected.
Nymex WTI (96.67) remains ranged coming off a bit from resistance near 97.20. But while above 96, it continues the near term uptrend and may see a rise towards 98.75-99 and even 101-102 in the coming weeks.
CURRENCIES
The Dollar Index (80.43) may attempt going higher as long as it stays above 80 and 79.70. Any major move would be expected only beyond the broader range of 79.70-81.50;
The Euro (1.3687) tested the major trend decider level of 1.3750. It must break above 1.3750 to extend the rally or else the bears may come down heavily once again.
Dollar-Yen (102.40) has reached closer to the major support level of 101.50-101.90, below which the end of the bull market will be signaled.
The Euro-Yen Cross (140.13) may extend the weakness further to 138.60-139 as long as it stays below 141.50.
The Pound (1.6499) is a comparative outperformer and may trade in the range of 1.6350-1.67 for some time more.
The Aussie (0.8704), hit by the weak Chinese PMI, is hanging to the major support of 0.87 precariously and could be in danger of seeing a meltdown towards 0.8500.
Dollar-Rupee (62.66) has a target of 62.97 for the current move which nicely coincides with the resistance of 63-63.10. The uptrend remains intact above 62.45-50 and further momentum may be expected above 62.73.
INTEREST RATES
The US 10Yr (2.73%) fell further and is testing immediate support near 1.70%. We may see the 10Yr drop further to test long term support near 2.50%.
The German 10Yr (1.66%) also dropped and fell below the lower boundary of our range of 1.70%-1.85% and is now testing support at 1.65%. The German-US 10Yr spread (-1.07%) dropped and we see it ranged between -1.00% and -1.10%.
The Japan 10Yr (0.61%) has also dropped and trading near the lower boundary of our range of 0.60%-0.70%. We may see it targeting support near 0.50% if the fall continues. The US-Japan 10Yr yield spread (2.11%) has fallen and is testing support at current level. We may see a bounce towards 2.25% if the support holds.
The Indian 10Yr GOI yield (8.74%) rose sharply. The RBI Policy Meeting is tomorrow. It is expected that the Central bank will keep the Key Interest rates unchanged after the low Inflation figures in December. A further movement of the yields can only be predicted after the Meeting tomorrow.
DATA TODAY9:00 GMT or 14:30 IST GER IFO Business Climate
...Expected 110.20 ...Previous 109.50
9:00 GMT or 14:30 IST GER IFO Business Situations
...Expected 112.20 ...Previous 111.60
9:00 GMT or 14:30 IST GER IFO Business Expectations
...Expected 108.00 ...Previous 107.40
15:00 GMT or 20:30 IST US New Home Sales
...Expected 457 K...Previous 464 K
FRIDAY'S DATA
CA Inflation Y/Y
... Expected 1.30 % ...Previous 0.90 % ...Actual 1.20%
EUR/USD
Trading range: 1.3660 – 1.3740
Trend: Up
Buy at 1.3674 SL 1.3642 TP 1.3727
GBP/USD
Trading range: 1.6475 – 1.6560
Trend: Up
Buy at 1.6487 SL 1.6455 TP 1.6546
USD/CHF
Trading range: 0.8975 – 0.8905
Trend: Down
Sell at 0.8963 SL 0.8995 TP 0.8913
USD/JPY
Trading range: 102.90 – 102.10
Trend: Down
Sell at 102.77 SL 103.09 TP 102.2
EUR/JPY
The current support/resistance levels are:
EUR/USD 1.3612, 1.3592, 1.3559 – 1.3736, 1.3756, 1.3789
USD/JPY 102.15, 101.93, 101.58 – 103.39, 103.61, 103.96
GBP/USD 1.6417, 1.6394, 1.6358 – 1.6557, 1.6580, 1.6616
USD/CHF 0.8900, 0.8881, 0.8850 – 0.8962, 0.8981, 0.9012
EQUITIES
Equities worldwide have tumbled big on weak Chinese PMI (49.6, down from 50.5) and news of the Argentine Peso devaluation.
The Dow (15879.11,-1.96%) is close to the major support zone of 15500-700 below which we may see the fall extend to 14700-800.
The Nikkei (15009.04,-2.49%) finished the second bout of a 1000 points fall in the last 5 weeks to signal the end of the bull market for now. Below 14700-800, it may target 13700 and 13200.
Shanghai (2038.92, -0.75%) is among the better performers in this turmoil as it has already been in a major bear market for while now and has been beaten a lot already much before the other markets came under bear grip. That said, it needs to rise past 2150 to break the longer term downtrend it is trapped in.
The Dax (9392.02, -2.48%) joined the global rout to test the major support zone of 9300-9350 below which the fall is expected to extend to 9000 or even 8700.
The Nifty (6266.75, -1.24%) may open sharply lower matching steps with the global weakness. The repeated failure to break above 6345-60 is resulting now in a drop to the lower end of the broader range at 6130-40. All the rallies may face selling pressure now and below 6130-40, we may expect to see 5970 and 5920.
COMMODITIES
Gold (1274.796) continues its upward rally targeting 1280-1300 in the near term. A break above 1274.42 would take it higher else we may see movements within the 1250-1274.4 regions.
Silver (19.948) came off from resistance near 20.28 and is testing crucial resistance on the 3-day charts. It may consolidate within the 19.5-20.5 regions for some more time and may target support near 18.5-19 if it breaks below 19.5.
Copper (3.2645) came off sharply from resistance near 3.30 and is trading lower. We may see a fall to 3.25-3.20 while below 3.30.
Brent (107.52) has bounced back sharply from just above the support near 106. Currently testing the 200-day MA support, if this holds we may rise towards 108.5. While above 107, a rise towards 109-110 may be expected.
Nymex WTI (96.67) remains ranged coming off a bit from resistance near 97.20. But while above 96, it continues the near term uptrend and may see a rise towards 98.75-99 and even 101-102 in the coming weeks.
CURRENCIES
The Dollar Index (80.43) may attempt going higher as long as it stays above 80 and 79.70. Any major move would be expected only beyond the broader range of 79.70-81.50;
The Euro (1.3687) tested the major trend decider level of 1.3750. It must break above 1.3750 to extend the rally or else the bears may come down heavily once again.
Dollar-Yen (102.40) has reached closer to the major support level of 101.50-101.90, below which the end of the bull market will be signaled.
The Euro-Yen Cross (140.13) may extend the weakness further to 138.60-139 as long as it stays below 141.50.
The Pound (1.6499) is a comparative outperformer and may trade in the range of 1.6350-1.67 for some time more.
The Aussie (0.8704), hit by the weak Chinese PMI, is hanging to the major support of 0.87 precariously and could be in danger of seeing a meltdown towards 0.8500.
Dollar-Rupee (62.66) has a target of 62.97 for the current move which nicely coincides with the resistance of 63-63.10. The uptrend remains intact above 62.45-50 and further momentum may be expected above 62.73.
INTEREST RATES
The US 10Yr (2.73%) fell further and is testing immediate support near 1.70%. We may see the 10Yr drop further to test long term support near 2.50%.
The German 10Yr (1.66%) also dropped and fell below the lower boundary of our range of 1.70%-1.85% and is now testing support at 1.65%. The German-US 10Yr spread (-1.07%) dropped and we see it ranged between -1.00% and -1.10%.
The Japan 10Yr (0.61%) has also dropped and trading near the lower boundary of our range of 0.60%-0.70%. We may see it targeting support near 0.50% if the fall continues. The US-Japan 10Yr yield spread (2.11%) has fallen and is testing support at current level. We may see a bounce towards 2.25% if the support holds.
The Indian 10Yr GOI yield (8.74%) rose sharply. The RBI Policy Meeting is tomorrow. It is expected that the Central bank will keep the Key Interest rates unchanged after the low Inflation figures in December. A further movement of the yields can only be predicted after the Meeting tomorrow.
DATA TODAY9:00 GMT or 14:30 IST GER IFO Business Climate
...Expected 110.20 ...Previous 109.50
9:00 GMT or 14:30 IST GER IFO Business Situations
...Expected 112.20 ...Previous 111.60
9:00 GMT or 14:30 IST GER IFO Business Expectations
...Expected 108.00 ...Previous 107.40
15:00 GMT or 20:30 IST US New Home Sales
...Expected 457 K...Previous 464 K
FRIDAY'S DATA
CA Inflation Y/Y
... Expected 1.30 % ...Previous 0.90 % ...Actual 1.20%
EUR/USD
Trading range: 1.3660 – 1.3740
Trend: Up
Buy at 1.3674 SL 1.3642 TP 1.3727
GBP/USD
Trading range: 1.6475 – 1.6560
Trend: Up
Buy at 1.6487 SL 1.6455 TP 1.6546
USD/CHF
Trading range: 0.8975 – 0.8905
Trend: Down
Sell at 0.8963 SL 0.8995 TP 0.8913
USD/JPY
Trading range: 102.90 – 102.10
Trend: Down
Sell at 102.77 SL 103.09 TP 102.2
EUR/JPY
The current support/resistance levels are:
EUR/USD 1.3612, 1.3592, 1.3559 – 1.3736, 1.3756, 1.3789
USD/JPY 102.15, 101.93, 101.58 – 103.39, 103.61, 103.96
GBP/USD 1.6417, 1.6394, 1.6358 – 1.6557, 1.6580, 1.6616
USD/CHF 0.8900, 0.8881, 0.8850 – 0.8962, 0.8981, 0.9012
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