The Dollar traded mixed by showing strength against AUD, NZD, and JPY while weakness against EUR, GBP, and CAD. US wholesale inventories fall 0.2% in Nov, the first decline for 2010. The Euro was trading around $1.301 after plumbed a four-month low of $1.2871 but caution ahead of key bond sales by highly indebted euro zone members: Portugal and Spain. Portugal's first debt auction of the year around 1.5 billion euros today while Spain is seeking up to 3 billion euros on Thursday. The Yen was trading around 83 levels. Japan's current-account surplus narrowed more than expected in November. The Sterling rose to $1.5635 from $1.5568 levels. The British Retail Consortium reported that same-store sales dipped 0.3% in December compared with the same month in 2009. The Aussie traded at 0.9851 levels after its fell to 0.9802 levels as market continues to factor in the economic impact of massive flooding in Queensland.
EUR/USD: The Euro is currently trading near the psychological levels 1.3000 levels, boosted after Japan pledged to purchase bonds from the EFSF. Today Portugal bond auction will be important for the nation. Looking ahead today, Industrial Production m/m expected 0.5%. Immediate support comes at 1.2870(Lower Daily Bollinger) followed by 1.2610 (Lower Weekly Bollinger), while resistance comes at 1.3100 (55 Daily EMA) followed by 1.3280(21 Daily EMA). EURINR (58.62) exporters hold for covers near 59.20 levels or above and importers cover for Jan partially at 58.20 levels or below. EUR/INR is likely to trade in the range of 58.50 - 58.80 today. Short term and Medium term: Bearish. EUR/USD target: 1.25 levels
GBP/USD: The Pound is currently trading at 1.5637 levels. Looking ahead today, Trade Balance expected at -8.2B vs. Previous -8.5B. Immediate resistance comes near 1.5745 (Middle Daily Bollinger) while support at 1.5420(Upper Daily Bollinger). GBPINR (70.47) 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 70.35 - 70.65 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY is currently trading at 83.15 levels. Japan's current account surplus narrowed down to 1.15T vs. previous 1.46T while Economy Watchers Sentiment is expected at 44.9. Immediate strong resistance is at 83.40 (100 Daily EMA) followed by 84.20(Upper Daily Bollinger) while support is at 82.80 levels (21 Daily EMA) followed by 82.65(Middle Daily Bollinger). 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 currently trading at 0.9855 levels had underperformed against all the majors yesterday as the Queensland floods deepened. Home Loans m/m increased to 2.5% compared to previous 2.2%. Immediate support comes at 0.9775 levels (100 Daily EMA) while immediate resistance is at 0.9915 levels (55 Daily EMA) followed by 0.9980(21 Daily EMA). 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 recovered and is currently trading near the resistance levels of 1387. Overall the metal had made a low of 1372.50 and a high of 1386.74. Immediate resistance is at $1400 followed by $1400 levels followed by $1431(High of 07.12.2010) while immediate support comes near $1354 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.69 levels had changed little and were consolidating just below the month high. Looking ahead today, Economic Optimism expected better at 47.1, Import Prices m/m expected stable at 1.3% and Crude Oil Inventories expected to increase to 0.4MB. 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.