US dollar was stronger as risk aversion seems to be dominating the markets after US Trade Balance came out weaker at -46.3B vs -40.3 B previously, Unemployment Claims came out weaker at 397K vs 371K previously. US Feb Budget Deficit stood at $222.50bln (month record) vs. $220.91bln year-ago. EUR is trading weaker with combined effect of Spain's downgrade and on weaker US data as Risk appetite is losing strength and can see a sell-off if a euro zone summit later in the day fails to ease concerns about sovereign debt. Manufacturing Production m/m came out better at 1.0% vs -0.1% previously. The dollar was slightly down against the yen, briefly pushing above 83 yen. China recorded a surprise trade deficit of US$7.3 billion for the month of February, which was highest in last 7 years. China's consumer prices rose to 4.9 percent in Feb from a year earlier, exceeding the government's 2011 target for a fifth month. Japan's 10yr bonds rose for the first time in last four days. Asian stocks fell this morning on growing concerns of MENA unrest.
EUR/USD: Euro slided downside for consecutive third session over Eurozone debt concerns. Meanwhile The EU summit will probably focus around member bailouts. Immediate resistance is at 1.3865 levels (Daily 100% Fibo) followed by 1.3877(H1 55 EMA) while Immediate support is seen at 1.3800 levels and 1.3770 levels. EURINR (62.54) 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 62.40 - 62.74 levels today. Short term: Slight bullish and Medium term: bullish.
GBP/USD: Pound nosedived towards 1.6069 levels post BOE kept rates on hold with Asset Purchase Facility also remaining stable at 200B. PPI Input m/m expected to remain weak. Daily stochastic is showing oversold levels. Immediate strong support is comes at 1.6045 and if breached then it would dive towards 1.5935 levels and resistance is seen near 1.6100 levels (4hrly 200 EMA). GBP/INR (72.72) March month's exporters should cover partially near 73.00 levels and importers cover near 72.35 levels. GBPINR is likely to trade in the range of 72.55-73.00 levels today. Short Term: Slight Bullish and Medium term: bullish
USD/JPY: The pair finally made a high above Y83 levels near 83.17 levels but is still hovering near the strong resistance of 100 Daily EMA levels of 82.83. China's CPI y/y increased to 4.9%. Daily Stochastic is showing movement towards overbought levels. Immediate resistance is at 83.22 levels while immediate strong support is at 82.57 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 as said yesterday can cover their exposure towards 83.25 levels and above. Medium Term: Maintain Bearishness
AUD/USD: The Aussie declined for consecutive fifth session and had dived below the parity levels to make a low at 0.9989 as commodities index showed downside movement followed by weak data in China. Immediate support is seen near 0.9993 levels (21 Daily lower Bollinger) followed by 0.9955(Daily 100 EMA) while Immediate resistance is seen near 1.0045 levels (Daily 55 EMA). Exporters are suggested to book March month exposure partially near 1.0150 - 1.0200 levels, while Importers can cover their exposure near 0.9500 levels. Medium term: Bullish.
Gold: The yellow metal retreated to make a low at 1402.88 levels despite the Libya's situation remained tense. Market was more focused over macroeconomic events. As mentioned yesterday, break of support of 1422.22 (4 hours 55 EMA) would suggest pull back towards 1410 levels. Meanwhile resistance comes at 1420.86 and 1423.44 levels while support is at 1411.06 levels. Medium term: Bullish.
Dollar Index: The US dollar index currently trading near 77.13 levels had rose to a two week high at 77.30 as risk aversion took hold of the markets due to global tensions.China's February trade deficit, weaker than expected jobs data, and continued MENA turmoil weighed on risk sentiment. Immediate support is at 76.91 levels while immediate resistance is at 77.32 levels Short Term: Bearish and Medium Term: Neutral.
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.