Forex Knowledge 18 MARCH 2014 currency Report.
EQUITIES
Almost all the global markets are strongly trading in the positive this morning after an encouraging U.S. industrial production data. Not much has changed structure-wise and not really expected until the U.S. FOMC meet concludes tomorrow.
Nikkei (14431.40, +1.08%) has achieved our initial target of 14400 and may fall further to our next target support of 14000. A break below 14000 may accelerate the decline to 13750 and then 13200.
Shanghai (2021.16, -0.12%) broke below the support of 2020-15 to test the January low. The bears dominate firmly as long as it stays below 2040-50 and reversal will come only on a break above 2080. A break below 1980-75 may take it to 1950-45.
Nifty (6504.20, +0.17%) ended its correction at 6433, much higher than 6415 and kept the short term trend bullish. With the low of 4530 holding; we may see Nifty achieving our intermediate target of 6650-6700 this week interrupted by shallow corrections.
Dow (16247.22, +1.13%) held above our support of 15900 for now and may consolidate between 15900 and 16600 for some time before launching the next move. The major uptrend will be threatened only on a break below 15500.
COMMODITIES
Gold (1360.64) fell from 1388 as better than expected US data curbed demand before the FED meeting today. Currently trading just above support near 1357.98, if it falls may test next support near 1350.9-1351 else could bounce back to 1400. Note that it has fallen from the trend resistance and may fall further if that holds.
Silver (21.08) has fallen a s well and is testing support near 20.98. It may consolidate for a few sessions within the 20.75-21.5 regions before deciding further moves.
Copper (2.9770) has bounced from long term support near 2.90 as expected. It may now rise to 3 while above 2.90. A sustained rise above 3 would indicate further upward movement.
Oil markets fall on speculation that the US and European Union sanctions against Russia are unlikely to disrupt the shipments. Nymex WTI (97.34) and Brent (106.35) have fallen sharply as expected. A little more fall towards 97 and WTI may bounce from there to 107.5-108. On the other hand, Brent may also accompany Nymex Crude but with lesser momentum.
CURRENCIES
Dollar Index (79.35) has been trading between our support at 79.10 and resistance of 80. A break above 79.70-80 may bring a trending rally but a break below 79.10 might be decisively bearish in the long term.
The Euro (1.3933) turned rangebound too between 1.3830 and 1.3970. The major support of 1.3830 was not breached but to generate upward momentum, the bulls must take Euro above 1.3980 and 1.4070. Otherwise, more of consolidation can be seen.
Dollar-Yen (101.78) is struggling near the lower end of the broader range of 101-104. The short term direction depends on the support of 101-100.75 now as a break below may take Yen to 99-98.75 but holding above it may continue the range bound price action.
The Euro-Yen Cross (141.80) remains in an uptrend without any serious momentum The bullish view to 144-145 survives as long as it holds above the major support area of 139-138 but a break below this support may turn the view bearish and may pull it down to 136-135.50 and even 131.
Pound (1.6638) is in a correction of its major uptrend now in the form of a bullish flag pattern. It may reach 1.69-1.7050 after the current correction finishes. All the dips till 1.6440-30 may be bought into.
Aussie (0.9086) has reached a very important time-price confluence zone and the bulls must break above 0.9150-0.92 by the next week to confirm an intermediate term reversal or else a sharp fall may take it back towards 0.87.
Dollar-Rupee (61.19) faced sharp rejection exactly from our target resistance of 61.55-60. The weekly candle formed by this closing makes the medium term outlook unclear at this moment even if the bias remains moderately bullish.
INTEREST RATES
The US 10Yr (2.68%) is up slightly, ahead of the FOMC Meeting where we may see Janet Yellen holding up Bernanke? policy and continue to taper. The 10-5Yr yield differential (1.09%) has dropped further. We expect the 10yr to maintain a range of 2.65-2.70% for now.
The German 10Yr (1.56%) is trading just above 1.55%. Above 1.55% we may see a rally to 1.65% or else it can target 1.50-1.45%. The Japan 10Yr (0.63%) has remained stab. We see a range of 0.60-0.65% for now before a rise to the channel resistance near 0.69-0.70%.
India's 10Yr GOI (8.79%) has risen above 8.75% and trading almost at our target of 8.80%. We may see a rise to 8.90% and maybe even 9.00% if it manages to stay above 8.80%.
EUR/USD: BUY AT 1.3886 FOR 1.4000 OBJECTIVE, STOP 1.3831
USD/JPY: SHORT AT 101.75 FOR 100.76 OBJECTIVE, STOP 102.43
GBP/USD: LONG AT 1.6603 FOR REVISED 1.6787 OBJ, STOP 1.6565
USD/CHF: LOWER SELL AT .8747 FOR .8632 OBJECTIVE, STOP .8807
AUD/USD: LONG AT .9035 FOR .9204; STOP AT .9004
USD/CAD: BUY AT 1.1035 FOR 1.1225 STOP AT 1.0950
Crosses
EUR/JPY: BUY AT 141.35 FOR 143.38 OBJECTIVE, STOP 140.44
EUR/GBP: REVISE BUY AT .8320 FOR .8467; STOP AT .8255
EUR/CHF: SHORT AT 1.2160 FOR 1.2082; STOP AT 1.2195
EUR/CAD: LONG AT 1.5375 FOR 1.5600; REVISED STOP AT 1.5305
GBP/JPY: BUY AT 168.85 FOR 171.60 STOP AT 167.80
NZD/USD: LONG AT .8260 FOR REVISED .8676; REVISE STOP AT .8480
EQUITIES
Almost all the global markets are strongly trading in the positive this morning after an encouraging U.S. industrial production data. Not much has changed structure-wise and not really expected until the U.S. FOMC meet concludes tomorrow.
Nikkei (14431.40, +1.08%) has achieved our initial target of 14400 and may fall further to our next target support of 14000. A break below 14000 may accelerate the decline to 13750 and then 13200.
Shanghai (2021.16, -0.12%) broke below the support of 2020-15 to test the January low. The bears dominate firmly as long as it stays below 2040-50 and reversal will come only on a break above 2080. A break below 1980-75 may take it to 1950-45.
Nifty (6504.20, +0.17%) ended its correction at 6433, much higher than 6415 and kept the short term trend bullish. With the low of 4530 holding; we may see Nifty achieving our intermediate target of 6650-6700 this week interrupted by shallow corrections.
Dow (16247.22, +1.13%) held above our support of 15900 for now and may consolidate between 15900 and 16600 for some time before launching the next move. The major uptrend will be threatened only on a break below 15500.
COMMODITIES
Gold (1360.64) fell from 1388 as better than expected US data curbed demand before the FED meeting today. Currently trading just above support near 1357.98, if it falls may test next support near 1350.9-1351 else could bounce back to 1400. Note that it has fallen from the trend resistance and may fall further if that holds.
Silver (21.08) has fallen a s well and is testing support near 20.98. It may consolidate for a few sessions within the 20.75-21.5 regions before deciding further moves.
Copper (2.9770) has bounced from long term support near 2.90 as expected. It may now rise to 3 while above 2.90. A sustained rise above 3 would indicate further upward movement.
Oil markets fall on speculation that the US and European Union sanctions against Russia are unlikely to disrupt the shipments. Nymex WTI (97.34) and Brent (106.35) have fallen sharply as expected. A little more fall towards 97 and WTI may bounce from there to 107.5-108. On the other hand, Brent may also accompany Nymex Crude but with lesser momentum.
CURRENCIES
Dollar Index (79.35) has been trading between our support at 79.10 and resistance of 80. A break above 79.70-80 may bring a trending rally but a break below 79.10 might be decisively bearish in the long term.
The Euro (1.3933) turned rangebound too between 1.3830 and 1.3970. The major support of 1.3830 was not breached but to generate upward momentum, the bulls must take Euro above 1.3980 and 1.4070. Otherwise, more of consolidation can be seen.
Dollar-Yen (101.78) is struggling near the lower end of the broader range of 101-104. The short term direction depends on the support of 101-100.75 now as a break below may take Yen to 99-98.75 but holding above it may continue the range bound price action.
The Euro-Yen Cross (141.80) remains in an uptrend without any serious momentum The bullish view to 144-145 survives as long as it holds above the major support area of 139-138 but a break below this support may turn the view bearish and may pull it down to 136-135.50 and even 131.
Pound (1.6638) is in a correction of its major uptrend now in the form of a bullish flag pattern. It may reach 1.69-1.7050 after the current correction finishes. All the dips till 1.6440-30 may be bought into.
Aussie (0.9086) has reached a very important time-price confluence zone and the bulls must break above 0.9150-0.92 by the next week to confirm an intermediate term reversal or else a sharp fall may take it back towards 0.87.
Dollar-Rupee (61.19) faced sharp rejection exactly from our target resistance of 61.55-60. The weekly candle formed by this closing makes the medium term outlook unclear at this moment even if the bias remains moderately bullish.
INTEREST RATES
The US 10Yr (2.68%) is up slightly, ahead of the FOMC Meeting where we may see Janet Yellen holding up Bernanke? policy and continue to taper. The 10-5Yr yield differential (1.09%) has dropped further. We expect the 10yr to maintain a range of 2.65-2.70% for now.
The German 10Yr (1.56%) is trading just above 1.55%. Above 1.55% we may see a rally to 1.65% or else it can target 1.50-1.45%. The Japan 10Yr (0.63%) has remained stab. We see a range of 0.60-0.65% for now before a rise to the channel resistance near 0.69-0.70%.
India's 10Yr GOI (8.79%) has risen above 8.75% and trading almost at our target of 8.80%. We may see a rise to 8.90% and maybe even 9.00% if it manages to stay above 8.80%.
EUR/USD: BUY AT 1.3886 FOR 1.4000 OBJECTIVE, STOP 1.3831
USD/JPY: SHORT AT 101.75 FOR 100.76 OBJECTIVE, STOP 102.43
GBP/USD: LONG AT 1.6603 FOR REVISED 1.6787 OBJ, STOP 1.6565
USD/CHF: LOWER SELL AT .8747 FOR .8632 OBJECTIVE, STOP .8807
AUD/USD: LONG AT .9035 FOR .9204; STOP AT .9004
USD/CAD: BUY AT 1.1035 FOR 1.1225 STOP AT 1.0950
Crosses
EUR/JPY: BUY AT 141.35 FOR 143.38 OBJECTIVE, STOP 140.44
EUR/GBP: REVISE BUY AT .8320 FOR .8467; STOP AT .8255
EUR/CHF: SHORT AT 1.2160 FOR 1.2082; STOP AT 1.2195
EUR/CAD: LONG AT 1.5375 FOR 1.5600; REVISED STOP AT 1.5305
GBP/JPY: BUY AT 168.85 FOR 171.60 STOP AT 167.80
NZD/USD: LONG AT .8260 FOR REVISED .8676; REVISE STOP AT .8480
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