CURRENCIES
Dollar Index (80.96) has bounced from the support zone of 80.30-50 towards the immediate resistance at 81.05-20. Strength will return above 81.20. The bias remains bullish as long as it stays 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 (1.3614) is trading near the lower boundary of a Bear Flag pattern. It had got rejected from the major supply zone of 1.3660-90 and found support at our support area of 1.3550-70 to remain rangebound. Only a rally above 1.3725-65 may mitigate the immediate weakness.
Dollar-Yen (104.24) corrected a bit from 105. Longer term uptrend back in force? In that case, the strength should be back from 103.65-104 and then the rally may target 107 now above 105.40-60.
The Euro-Yen Cross (141.93) is correcting exactly from the major supply zone at 143-143.30 in line with our expectation. The bears were expected to return at this level. Bulls must break above this zone to continue the rally. Otherwise, another drop to 141.40 or 140.50 would remain on the cards.
The Pound (1.6331) is in the 3rd 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 (0.8806) made a new 3 year low at 0.8777 in a single day of the possibility being discussed in this space. It had failed to stay above 0.90 and broke down below 0.8950-60 to signal the termination of the bounce. Now any rally towards 0.8950-90 is expected to be sold into. Now the last hope for the bulls would be the major long term support area of 0.87-0.8720.
Dollar Rupee (61.54) may open flat today. It neither broke above the resistance of 61.70-75 nor below the support at 61.40-42 yesterday. The bulls managed to protect 61.40 and keep their hopes still alive. But the trend remains firmly down and the weakness persists as long as it stays below 61.70-75 and the possibility of a retest of the major support zone of 60.80-61.20 remains open. Above 61.70-75, resistance comes at 62.
INTEREST RATES
The US 10Yr (2.84%) fell before the release of the Housing Starts and Industrial Production data. It is expected that the Housing Starts will decline the Industrial production will be slow. The 5Yr (1.64%) and the 30Yr (3.77%) also fell in line with the 10Yr yields.
The German 10Yr (1.78%) fell after the slow growth of inflation in the Euro Area. The German-US 2Yr spread (-0.18%) is stable and in the support zone of -28%-0.30%. The UK 10Yr (2.81%) also fell saw a rise and is ranged between 2.75%-3.00%.
The Japan 10Yr (0.66%) remained unchanged. The US-Japan 10Yr Differential (2.17%) fell with the fall in US Yields.
The Indian 10Yr GOI yield (8.61%) also fell further with the low Inflation data. With the inflation coming in lower it is speculated that the RBI will refrain from increasing the borrowing costs later this month.
DATA TODAY
13:30 GMT or 19:00 IST US Housing Starts (Mln)
...Expected 990 K ...Previous 1091 K
14:15 GMT or 19:45 IST US Industrial Production
...Expected 0.40 % ...Previous 1.10 %
14:15 GMT or 19:45 IST US Capacity Utilization
...Expected 79.20 % ...Previous 79.0 %
DATA YESTERDAY
Australia Labour Force
...Expected 10.30 K ...Previous 15.4 K ...Actual -22.60 K
EU CPI (YoY)
...Expected 0.80 % ...Previous 0.85 % ...Actual 0.86 %
US Core CPI (MoM)
...Expected 0.10 % ...Previous 0.16 % ...Actual 0.11%
US TICS (Net foreign purch of long-term Sec)
...Expected 42.30 $ Bln ...Previous 28.70 $ Bln ...Actual -29.30 $ Bln
US Philifed Index
...Expected 8.80 ...Previous 7.00 ...Actual 9.40
TODAY CURRENCY TRADING TARGET
EUR/USD: LONG AT 1.3615 FOR 1.3762; STOP AT 1.3545
USD/JPY: SHORT AT 104.45 FOR 102.85; STOP AT 105.20
GBP/USD: SHORT AT 1.6420 FOR REVISED 1.6250 OBJECTIVE; STOP AT 1.6432
USD/CHF: LONG AT .8995 FOR .9165 OBJECTIVE, REVISED STOP .9018
AUD/USD: LOOK TO SELL BOUNCE
USD/CAD: LONG AT 1.0880 FOR REVISED 1.1126 STOP AT 1.0836
EUR/JPY: SHORT AT 142.86 FOR 140.78 OBJECTIVE, REVISED STOP 142.50
EUR/GBP: LONG AT .8315 FOR .8432; STOP AT .8280
EUR/CHF: LONG AT 1.2335 FOR A 1.2435 OBJECTIVE; STOP AT 1.2310
EUR/CAD: LONG AT 1.4910 FOR 1.5175 OBJ, STOP AT 1.4810
GBP/JPY: POSSIBLY SELL
NZD/USD: LONG AT .8285 FOR A .8433 OBJECTIVE; STOP AT .8225
eur/jpy
gbp/usd
eur/usd
usd/chf
Dollar Index (80.96) has bounced from the support zone of 80.30-50 towards the immediate resistance at 81.05-20. Strength will return above 81.20. The bias remains bullish as long as it stays 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 (1.3614) is trading near the lower boundary of a Bear Flag pattern. It had got rejected from the major supply zone of 1.3660-90 and found support at our support area of 1.3550-70 to remain rangebound. Only a rally above 1.3725-65 may mitigate the immediate weakness.
Dollar-Yen (104.24) corrected a bit from 105. Longer term uptrend back in force? In that case, the strength should be back from 103.65-104 and then the rally may target 107 now above 105.40-60.
The Euro-Yen Cross (141.93) is correcting exactly from the major supply zone at 143-143.30 in line with our expectation. The bears were expected to return at this level. Bulls must break above this zone to continue the rally. Otherwise, another drop to 141.40 or 140.50 would remain on the cards.
The Pound (1.6331) is in the 3rd 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 (0.8806) made a new 3 year low at 0.8777 in a single day of the possibility being discussed in this space. It had failed to stay above 0.90 and broke down below 0.8950-60 to signal the termination of the bounce. Now any rally towards 0.8950-90 is expected to be sold into. Now the last hope for the bulls would be the major long term support area of 0.87-0.8720.
Dollar Rupee (61.54) may open flat today. It neither broke above the resistance of 61.70-75 nor below the support at 61.40-42 yesterday. The bulls managed to protect 61.40 and keep their hopes still alive. But the trend remains firmly down and the weakness persists as long as it stays below 61.70-75 and the possibility of a retest of the major support zone of 60.80-61.20 remains open. Above 61.70-75, resistance comes at 62.
INTEREST RATES
The US 10Yr (2.84%) fell before the release of the Housing Starts and Industrial Production data. It is expected that the Housing Starts will decline the Industrial production will be slow. The 5Yr (1.64%) and the 30Yr (3.77%) also fell in line with the 10Yr yields.
The German 10Yr (1.78%) fell after the slow growth of inflation in the Euro Area. The German-US 2Yr spread (-0.18%) is stable and in the support zone of -28%-0.30%. The UK 10Yr (2.81%) also fell saw a rise and is ranged between 2.75%-3.00%.
The Japan 10Yr (0.66%) remained unchanged. The US-Japan 10Yr Differential (2.17%) fell with the fall in US Yields.
The Indian 10Yr GOI yield (8.61%) also fell further with the low Inflation data. With the inflation coming in lower it is speculated that the RBI will refrain from increasing the borrowing costs later this month.
DATA TODAY
13:30 GMT or 19:00 IST US Housing Starts (Mln)
...Expected 990 K ...Previous 1091 K
14:15 GMT or 19:45 IST US Industrial Production
...Expected 0.40 % ...Previous 1.10 %
14:15 GMT or 19:45 IST US Capacity Utilization
...Expected 79.20 % ...Previous 79.0 %
DATA YESTERDAY
Australia Labour Force
...Expected 10.30 K ...Previous 15.4 K ...Actual -22.60 K
EU CPI (YoY)
...Expected 0.80 % ...Previous 0.85 % ...Actual 0.86 %
US Core CPI (MoM)
...Expected 0.10 % ...Previous 0.16 % ...Actual 0.11%
US TICS (Net foreign purch of long-term Sec)
...Expected 42.30 $ Bln ...Previous 28.70 $ Bln ...Actual -29.30 $ Bln
US Philifed Index
...Expected 8.80 ...Previous 7.00 ...Actual 9.40
TODAY CURRENCY TRADING TARGET
EUR/USD: LONG AT 1.3615 FOR 1.3762; STOP AT 1.3545
USD/JPY: SHORT AT 104.45 FOR 102.85; STOP AT 105.20
GBP/USD: SHORT AT 1.6420 FOR REVISED 1.6250 OBJECTIVE; STOP AT 1.6432
USD/CHF: LONG AT .8995 FOR .9165 OBJECTIVE, REVISED STOP .9018
AUD/USD: LOOK TO SELL BOUNCE
USD/CAD: LONG AT 1.0880 FOR REVISED 1.1126 STOP AT 1.0836
EUR/JPY: SHORT AT 142.86 FOR 140.78 OBJECTIVE, REVISED STOP 142.50
EUR/GBP: LONG AT .8315 FOR .8432; STOP AT .8280
EUR/CHF: LONG AT 1.2335 FOR A 1.2435 OBJECTIVE; STOP AT 1.2310
EUR/CAD: LONG AT 1.4910 FOR 1.5175 OBJ, STOP AT 1.4810
GBP/JPY: POSSIBLY SELL
NZD/USD: LONG AT .8285 FOR A .8433 OBJECTIVE; STOP AT .8225
eur/jpy
gbp/usd
eur/usd
usd/chf
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