The dollars weaken after Fed Chief Bernanke stated that Unemployment remained stubbornly high and that it was possible to expand QEII. The Euro won a slight reprieve though it was still dogged by the downgrade of Hungary's credit rating and disagreements within the EU in regards to the expansion of the Bailout fund. The Yen fell to as low as 82.46 the lowest level since Nov. 15 a three-week low, after Bernanke's comments helped it to break out of a rough 83.50-84.50 range. The Sterling was heavy for most of the day with risk off trading and a resurgent USD. The AUD was under pressure due to profit taking with investors sidelined ahead of today's RBA rate announcement. RBA leaves cash rate unchanged at 4.75% and said inflation would be little changed over next few quarters
EUR/USD: The Euro is currently trading at 1.3340 after the division was seen among officials in yesterday's Euro group meeting on whether to enlarge the bailout facility, the Germans, Austrians and Dutch voicing some opposition. Immediate support comes near 1.3260 levels (21 day EMA, 4hr), then next support at 1.3145 levels (61.8% retracement), while immediate resistance comes near 1.3410 (21 daily EMA, Weekly). EURINR (59.80) -Importers hold for cover. Exporters are suggested to book near term exposure in 60.00 - 60.40 regions. Short term and Medium term: Bearish. EUR/INR is likely to trade in the range of 59.60-59.90 today.
GBP/USD: The Pound is currently trading at 1.5738. Immediate resistance comes near 1.5780 levels (21 days daily EMA), while support is expected around 1.5630 levels (200 days EMA, Daily) and next 1.5480 (Recent low). Exporters are suggested to book Dec month's exposure on spikes near 70.70 - 71.00 levels while Importers can cover partially on dips (70.30) levels. Short Term: Bearish; Medium Term: Neutral. GBP/INR is likely to trade in the range of 70.40-70.70 today.
USD/JPY: USD/JPY (82.38) fell to a three-week low at 82.46 dropping below its 55-day moving average of 82.53, the lowest level since Nov. 15 before closing at 82.65. Immediate Support is at 82.36 (21days lower Bollinger) while immediate resistance is at 82.96 (55 Daily EMA) levels followed by 83.10(21 Daily EMA). Yen Exporters are suggested to book Dec and Jan month's exposure near 82 levels and Yen Importers can cover their exposure towards 84 levels. Medium Term: Maintain Bearishness.
AUD/USD: The Aussie is currently trading at 0.9904 levels. It had fallen from 0.9918 to 0.9848 levels and had later recovered to 0.9885 yesterday. Cash Rate was stable at 4.5%. Immediate support comes at 0.9803 (21 Daily EMA) levels while immediate resistance 0.9952 levels (high of 22.11.2010). Exporters are suggested to book partial Dec and Jan month's exposure towards 0.99 levels or above and Importers can cover their exposure on dips. Medium term: Bullish
Gold: Gold (1412.80) continued to trade higher by taking advantage of the sovereign debt concerns. Overall it traded with a low of $1409.88 and had made a fresh high of $1427.44 before closing at $1420 yesterday. Immediate resistance is at 1,424.30 level followed by 1,438 levels. Immediate support comes near 1381 levels followed by downside 1350 levels which are a very important support. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 79.49 levels after gaining yesterday due to comments made by Bernanke regarding expansion of QE as unemployment remained high. Looking ahead IBD/TIPP Economic Optimism is expected stronger at 48.3 than previous at 46.7. The support level is at 78.50 followed by a strong support at 77.80 levels and resistance is at 79.80 and next 80.50 levels.