The Dollar posted small advances, adding to a strong weekly gain, after reports showed that the U.S. trade deficit narrowed more than expected and consumer confidence rose more than expected this month. Chinese economic data (CPI 5.1% yoy was released on Saturday after markets closed) has been very strong, and an interest rate hike is now only a matter of time. US 10yr treasury yields made a fresh six-month high of 3.33%, rising 15bp. Against the yen, it held near 84.00, not far from a two-month high around 84.07 set recently. The market is also watching the BOJ closely to see if they will expand their own QE program. The Euro slipped 0.1 % to $1.3189, with worries about debt levels in peripheral euro zone members casting a shadow on its outlook. The Sterling traded at 1.5781 levels after weaker November PPI at 3.3 vs. 3.5% y/y realized on Friday. The Aussie traded at 0.9845 back on USD strength.
EUR/USD: The Euro is currently trading at 1.3186 levels. Euro is trading in a bearish zone below 1.3440 levels target 1.3000 against greenback. EURINR (59.60) - Importers can cover near 59.20 - 59.40 levels. Exporters are suggested to book near term exposure near 60.00 levels. Short term and Medium term: Bearish. EUR/INR is likely to trade in the range of 59.40 - 80 today.
GBP/USD: The Pound is currently trading at 1.5785. Immediate resistance comes near 1.5810 levels (200 days 4Hrly EMA), while support is expected around 1.5765 levels (100 days EMA, Daily) and next 1.5640. Exporters are suggested to book Dec month's exposure 71.40 - 71.50 levels, while Importers can cover partially on dips (70.50) levels. Short Term: Bearish; Medium Term: Neutral. GBP/INR is likely to trade in the range of 71.10-71.50 today
USD/JPY: USD/JPY is currently trading at 84.02 levels. Overall USDJPY traded with a low of 83.44 and a high of 84.02 before closing at around 83.95 last week. Immediate Support is at 83.58 (21 Days Bollinger), while immediate resistance is at 84.30 (21 Weekly EMA). Yen Exporters are suggested to book Dec and Jan month's exposure on dips and Yen Importers can cover their exposure above 84.30 levels. Medium Term: Maintain Bearishness.
AUD/USD: The Aussie is currently trading at 0.9844 levels. It had at dipped at 0.9830 levels for a few minutes on the China RRR hike and later on resumed its rally and traded near 0.9900 levels last week. Looking ahead today, NAB Business Confidence and Housing Starts q/q due today. Immediate support comes at 0.9780 levels (55 Daily EMA) while immediate resistance 1.0000 levels. Exporters are suggested to book Dec and Jan month's exposure above 0.99 levels, and Importers can cover their exposure on dips. Medium term: Bullish
Gold: Gold (1386.60) had fallen sharply last Friday by $20 on China's rate hike by 50basis points. Overall the yellow metal traded with a low of $1371.90 and high of $1392.25 before closing at $1386.61. Immediate resistance is at $1410 levels followed by $1,431.28 levels while immediate support comes near $1380 levels followed by downside $1350 levels. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.24 levels after a spike in U.S Treasury yields. Looking ahead market will be more focused on tomorrow's FOMC statement along with number of key events from the economy. The support level is at 79.45 followed by a strong support at 77.80 levels and resistance is at 80.50 levels. Medium Term: Slight 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.