India Forex Advisors / Market Commentary /10_Mar_2011

By @ibtimes on

Dear Reader,

Global Markets:

The dollar was stable as Euro was under pressure after weaker than expected Portuguese bond auctions. EUR 1b of 2 years Portuguese bonds were sold with yields sharply up to 5.993% as compared to 4.086% in a sale last September. Bid-to-cover ratio was also down to 1.6, from prior 1.9. Yesterday 10 year Portuguese bond yields rose towards 7.8%, hitting an all-time EuroZone high. Yesterday, EUR German Industrial Production m/m came out better at 1.8% as expected. President Muammar Qaddafi's forces carried out air strikes on central oil ports to weaken the rebels and to stop their advances towards the regime. Rising Inflation forced Bank of Korea to increase their benchmark interest rates by 25 bps to 3%. JPY Final GDP q/q came out neutral at -0.3% as expected. AUD Employment Change came out weaker at -10.1K vs 7.7K previously and Unemployment Rate came out neutral at 5.0%. New Zealand dollar plunges after RBNZ cut rates by 50bps to 2.50%, which is deeper than market expectation of 25bps cut. This was done to limit the impact of the earthquake on the economy. RBNZ also quoted that GDP was weaker than expectation even before the earthquake and the signs of recovery in 2011 was affected by the earthquake.

Technical Outlook:

EUR/USD: Euro was more focused on the ongoing Eurozone debt problems. Eurozone government bonds were stable except for Greece, which rose 6bp fresh record high yield. Meanwhile the pair can move volatile today due to many data piled up. Immediate resistance is at 1.3923 levels (H4 21 EMA) followed by psychological resistance is at 1.40 while Immediate support is seen at 1.38700 levels and 1.3848 levels. EURINR (62.60) exporters can cover near 63.00 levels for March exposure and Importers can cover partially near 62.15 levels. EUR/INR is likely to trade in the range of 62.45 - 62.90 today. Short term: Slight bullish and Medium term: bullish.

GBP/USD: Pound was quite strong trading near 1.6190 levels on improving economic data and was more focused on today's Official Bank Rate which is to be remain near 0.50%. Daily stochastic is showing slight upside direction. Immediate strong support is comes at 1.6185 and if breached then it would dive towards 1.6115 levels and resistance is seen near 1.6205 levels (4hrly Middle Bollinger). GBP/INR (72.97) March month's exporters should cover partially near 73.15 levels and importers cover below 72.50 levels. GBPINR is likely to trade in the range of 72.75-73.20 levels today. Short Term: Slight Bullish and Medium term: bullish

USD/JPY: The pair rose for consecutive second session to hover near Y83 levels with Final GDP q/q coming stable at -0.3% as expected. Daily Stochastic is showing upside movement. Immediate resistance is at 82.83 levels (200 daily EMA) which if broken can spike the pair towards Y84 levels while immediate strong support is at 82.56 levels (Daily 21 Middle Bollinger and 55 EMA). Yen Exporters are suggested to book March month's exposure partially near 82.15 levels and further on dips while Yen Importers can cover their exposure towards 83.25 levels and above. Medium Term: Maintain Bearishness

AUD/USD: The pair is trading at 1.0065 after making a high at 1.0132 levels post NZ rate cut. Kiwi dived initially after RBNZ cut rate by 50bps to 2.50%, deeper than market expectation of 25bps cut in order to lessen the economic impact of the earthquake. Meanwhile AUD Unemployment Rate came stable at 5.0% as expected. Immediate support is seen near 1.0045 levels (55 daily EMA) while Immediate resistance is seen near 1.0100 levels (Daily 21 Middle Bollinger). Exporters are suggested to book March month exposure partially near 1.0200 levels, while Importers can cover their exposure below parity levels. Medium term: Bullish.

Gold: Gold is still trading well inside rising channel with focus on unrest in Arab World and renewed concern about euro zone debt, all supporting the metal's safe haven appeal. However, break of support of 1422.22 (4 hours 55 EMA) will suggest pull back towards 1410 levels. Meanwhile resistance comes at 1436.85 and 1445 levels. is no clear sign of reversal yet. Medium term: Bullish.

Dollar Index: Dollar index is facing strong resistance from 4 hours 55 EMA at 76.87levels and further rise from this levels will give another strong resistance at 77.24 levels (21 days Daily EMA) to limit. Sustained break of 76.13 (Low of 07.03.2011) will send dollar index through 75.63 levels. Short Term: Bearish and Medium Term: Neutral.

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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