IIndia Forex Advisors / Market Commentary /10_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

The Dollar is slightly weaker after Bernanke said that unemployment rate will likely remain high for some time in spite of recent sharp fall. He warned that several years is needed before unemployment rate returns to a more normal level. US Crude Oil Inventories came out at 1.9M vs 2.6 previously. The Euro is lifted slightly after President Bundesbank will drop out of race to succeed Trichet as ECB chairman. German Trade Balance came out better at 14.0B vs 11.8B previously. New Zealand dollar was under mild pressure earlier today after Finance Minister English said that recovery in the country is having some challenges and there are possibilities of a double-dip recession. Australian fundamental data shows that the nation is on the track of recovery. Aud MI Inflation Expectations came out weaker this morning at 4.3% vs 4.6% previously, Employment Change came out stronger at 24.0K vs 1.8K previously and Unemployment Rate came out Neutral at 5%.

Technical Outlook:

EUR/USD: The Eurusd is currently trading at 1.3710 levels and had touched a low of 1.3610 levels yesterday. Immediate support is at 1.3656 (21 H4 EMA) followed by 1.3632 (H4 21 Middle Bollinger) while immediate resistance comes at 1.3730 (H4 21 Upper Bollinger). The preferred strategy is to sell upticks near 1.3650 -1.3750 levels. Looking ahead, President Weber Speech, ECB Monthly Bulletin and French Industrial Production m/m expected lower at -0.3%. EURINR (62.46) exporters can cover partially at current levels and very near term importers can cover near 61.70 levels. EUR/INR is likely to trade in the range of 62.25 -62.60 today. Short term: Neutral and Medium term: Bearish.

GBP/USD: The Pound is currently trading at 1.6092 levels and had touched a low of 1.6031 levels yesterday after Trade Balance widened to -9.2B as compared to previous at -8.5B. Daily Stochastic is showing downside. Looking ahead today, Manufacturing Production m/m expected at 0.5% along with Official Bank Rate expected stable at 0.50%. Immediate support is at 1.6065 (55 H4 EMA) followed by 1.5995 (Daily 21 Middle Bollinger) while immediate resistance comes at 1.6150 (H4 21 Upper Bollinger). GBPINR (73.34) Exporters should partially cover at current levels and importers hold for cover. GBPINR is likely to trade in the range of 73.15 - 73.40 levels today. Short term: Slight Bullish and Medium term: Bearish.

USD/JPY: The Pair is currently trading at 82.54 levels with Core Machinery Orders m/m declined to 1.7%. Yen is likely to trade in the range between 81.20- 83.40 levels. Stay below 83.40 the bias remains bearish. Yen Exporters can cover Feb month's exposure around 81.10 levels and Yen Importers to cover their exposures near 83.40 levels. Medium Term: Maintain Bearishness for the pair.

AUD/USD: The Aussie is currently trading at 1.0084 levels and touched high of 1.0143 levels. With 1.0045 support (21 Daily EMA), further rise is still expected and above 1.0199 will target 1.0254. On the downside, break of 1.0055 will bias back to the downside for 0.9803/9831 support zone. Exporters are suggested to book partially Feb month's exposure at current levels, and Importers can cover their exposure on dips. Medium term: Bullish.

Gold: GOLD($1361) traded in a subdued manner in overnight trade as currencies were mixed and equity markets moved to the downside, leaving little direction. We expects upside to be limited by 1379.16(61.8% retracement of 1424.4 to 1309.1) Support for gold is near $1311 levels (200 daily EMA). As suggested earlier, Buying on dips is recommended. Medium term: Maintain bullishness.

Dollar Index: Dollar Index down currently trading at 77.64, compared to 78.35 a couple of days back as Dollar trades weaker note. Immediate support comes at 76.80 levels, while resistance at 78.28 levels Medium Term: Slight Bullish.

DISCLAIMER
These views/ forecasts/ suggestions, though proffered with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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