The Dollar loses ground as commodities rebounded and Euro remains soft on speculation of a possible bailout for Portugal. 10 year Portuguese bond yield spiked higher to 7.43% before falling back below 7.1% on rumor that ECB is buying in the secondary markets to intervene the bond prices. Also Euro soared after Japanese Finance Minister Yoshihiko Noda told a news conference that Japan will purchase euro-zone bonds to help bolster confidence in the European Financial Stability Facility. Aussie extended it falls at low of 0.9843 on the grounds of worsening effect of the floods in Queensland. Also today weak data is expected from Aussie as trade surplus seems to be narrowed from 2.56B to 1.93B. The Yen traded at 83.07 levels, the market is undecided on direction with US Bond Yields.
EUR/USD: The Euro is currently trading at 1.2942 levels. Yesterday French and German officials denied that about putting pressure on Portugal to accept a bailout package but bond yields are still being high and the market continued to be supported by the ECB. January Sentix improved to 10.6 vs. 9.7 previously. Immediate support comes at 1.2885(Lower Daily Bollinger) followed by 1.2540 (Lower Weekly Bollinger), while resistance comes at 1.3150(Middle Daily Bollinger) followed by 1.3285 (55 Daily EMA). EURINR (58.70) exporters hold for covers near 59.20 levels or above and importers cover for Jan partially at 58.50 levels or below. EUR/INR is likely to trade in the range of 58.50 - 58.90 today. Short term and Medium term: Bearish. EUR/USD target: 1.25 levels
GBP/USD: The Pound is currently trading at 1.5546 levels. BRC Retail Sales Monitor y/y decline to -0.3% vs. 0.7% previously. Immediate resistance comes near 1.5610 (200 Daily EMA) while support at 1.5490(Middle Daily Bollinger). GBPINR (70.56) Exporters hold for covers near 71 levels or above and importers cover partially for Jan at 70.20 levels or below. GBPINR is likely to trade in the range of 70.40 - 70.80 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY is currently trading around 83 levels. Overall USD/JPY traded with a low of 82.66 and a high of 83.28 yesterday. Looking ahead today, Leading Indicators forecasted better at 100.9% vs. 97.2% previously. Immediate strong resistance is at 83.40 (100 Daily EMA) while support is at 82.75 levels (21 Daily EMA) followed by 82.75(21 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 extended its losses and is currently trading at 0.9860 levels led by worsening effect of the floods in Queensland and Trade Balance decline to 1.93B vs. 2.56B previously. Immediate support comes at 0.9775 levels (100 Daily EMA) while immediate resistance is at 0.9915 levels (55 Daily EMA) followed by the parity levels. Exporters are suggested to book Jan and Feb month's exposure above 1.0100 levels, and Importers can cover their exposure on dips. Medium term: Bullish.
Gold: Gold is currently trading at 1375.60 and is nearing the resistance levels of 1378. Overall the metal had made a low of 1354.59 and a high of 1377.50. Immediate resistance is at $1387 followed by $1400 levels while immediate support comes near $1353 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.93 levels as US yields declined. Looking ahead today, FOMC Member Speech, Economic Optimism expected better at 47.1. There is a support at 79.80 followed by 78.83 levels and resistance is at 81.50 levels. Breakout of resistance can take the index higher towards 82 levels. Medium Term: 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.