The Dollar was strengthen more after strong private employment expected to maintain its gains on better Friday's payrolls number . The ADP report showed a record 297,000 private-sector jobs were created in December, reinforcing views that the country is on a steady path to recovery and sending U.S. Treasury yields higher across the curve, which supported the dollar. The Euro stayed under pressure on nagging worries about debt problems as comments from the Swiss National bank that they would no longer accept Irish debt as collateral. The Yen was near a two-week high against the dollar, traded at 83.22 yen, away from an 8-week low of 80.93. The Sterling was under pressure with strong dollar and weaker Construction PMI at 49.1 vs. 51.8 previously. The Australian dollar traded, a two-week low, below parity at around $0.9954 after hitting a 28-year peak of $1.0325.
EUR/USD: The Euro is currently trading at 1.3136 levels after SNB comments that they would no longer accept Irish debt as collateral. Final Services PMI was strong at 54.2 vs. 53.7 previously. Looking ahead today, Retail Sales m/m expected 0.3% vs. 0.1% previous while German Factory Orders m/m expected to decline to 1.0% vs. 1.6% previous. Immediate support comes at 1.3045 levels (lower Bollinger) and next 1.2970, while resistance comes at 1.3215 (Middle Bollinger) followed by 1.3330 (200 Daily EMA). EURINR (59.60) exporters hold for covers near 60 levels and importers cover for Jan at around 59.20 or below levels. EUR/INR is likely to trade in the range of 59.40 - 59.80 today. Short term and Medium term: Bearish.
GBP/USD: The Pound is currently trading at 1.5506 levels and it had touched low of 1.5449 and a high of 1.5627 yesterday. Construction PMI declined to 49.1 vs. 51.8 previously. Looking ahead today, Services PMI data expected 52.9. Immediate resistance comes near 1.5615 levels (200 Daily EMA) followed by 1.5665 (100 Daily EMA) while support at 1. 1.5340(lower Bollinger). GBPINR (70.40) Exporters hold for covers near 70.80 levels and importers cover for Jan near 69.80 levels or below. GBPINR is likely to trade in the range of 70.20 - 70.60 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY crossed 83 levels after good U.S. data and is currently trading at 83.29 levels. U.S. interest rates had moved higher than yen which triggered carry trades and drove money flows back into the US market that weakened yen to a two-week low to 83.37 levels. Immediate strong resistance is at 83.50 (100 Daily EMA) while support is at 82.85 levels (55 Daily EMA). Yen Exporters are suggested to book Jan and Feb month's exposure around 81 levels and Yen Importers had already been advised to cover their exposures near 84 levels. Medium Term: Maintain Bearishness for the pair Target 80 and below.
AUD/USD: The Aussie is trading below the parity levels at 0.9955 on back of heavy selling seen yesterday. HIA New Home Sales m/m came negative at 0.2% vs. 6.1% previous. Immediate support comes at 0.9915 levels (55 Daily EMA) followed by 0.9760 levels (100 Daily EMA) while immediate resistance is at 1.0256 levels (High of 31.12.2010). Exporters are suggested to book Jan and Feb month's exposure at around 1.0200 levels, and Importers can cover their exposure on dips. Medium term: Bullish.
Gold: Gold is currently trading at 1375.29 levels and had tested the downside support after a profit booking was seen in the commodity sector. Overall the yellow metal had made a low of 1363.79 and a high of 1384.75. Immediate resistance is at $1400 followed by $1,431 levels while immediate support comes near $1370 levels followed by $1352 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.32 levels after a very strong U.S. data. Dec ADP Private Employment soared past expectations at 297k vs. 100k forecast. Dec Services PMI also soared to 57.1 vs. 55 previously. Looking ahead today, Unemployment Claims expected at 400K vs. 388K previously. There is a support at 79.80 followed by 78.83 levels and resistance is at 80.50(200 Daily EMA and Trend Line) followed by 81.50 levels. Holding above 80.50 would be quite bullish.
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.