With U.S. stocks rising to a fresh two-year high and bond yields increasing and sell-off in the dollar would be largely attributed to an improvement in risk appetite. Looking ahead, Weekly Jobless Claims are forecast at 405k vs. 409k previously. November Trade Balance forecast at -40.5bn vs. -38.7bn previously. The Euro recovered above 1.3100 levels, made high of 1.3145 on good demand for Portuguese bond auction at lower yield. Spanish and Italian bond sales next major focus. The Yen traded sideways between 82.79 and 83.47, holding within the previous session's trading range. The Sterling was at fresh week highs above 1.5750 tracking the Euro. The Aussies was traded at 0.9942 as shorts position squeeze off and flooding was not as bad as forecasted. Unemployment rate for December 5.0 % from 5.2 % in November versus expectations of 5.1 %. Thailand's central bank raised its policy rate 2.25bp. Bank of Korea unexpectedly raises interest rates by 0.25 % to 2.75 % .
EUR/USD: The Euro recovered and is currently trading near 1.3104 levels tracking the Bond yields which had eased after a good demand for Portuguese bonds overnight ahead of the bond auction of Spain and Italy. Immediate support comes at 1.2870(Lower Daily Bollinger) followed by 1.2610 (Lower Weekly Bollinger), while resistance comes at 1.3140(Middle Daily Bollinger) followed by 1.3270(55 Daily EMA). EURINR (59.04) exporters hold for covers near 59.50 levels or above and importers cover for Jan partially towards 58.30 levels or below. EUR/INR is likely to trade in the range of 58.90 - 59.30 today. Short term and Medium term: Bearish. EUR/USD target: 1.25 levels
GBP/USD: The Pound is currently trading at 1.5745levels with UK trade balance coming to ?8.7bn in Nov. , a new record high for the deficit . Looking ahead today, Official Bank Rate expected stable at 0.50% with Manufacturing Production m/m forecasted at 0.5%. Immediate resistance comes near 1.5745 (Middle Daily Bollinger) while support at 1.5420(Upper Daily Bollinger). GBPINR (70.97) Exporters hold for covers near 71.40 levels or above and importers cover partially for Jan towards 70.30 levels or below. GBPINR is likely to trade in the range of 70.85 - 71.25 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY is currently trading at 83.00 levels. Immediate strong resistance is at 83.40 (100 Daily EMA) followed by 84.10(Upper Daily Bollinger) while support is at 82.80 levels (21 Daily EMA) followed by 82.60(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 0.9940 levels. Unemployment Rate declined to 5.0% while Employment Change added few workers to 2.3K compared to previous 54.6K. Immediate support comes at 0.9715 levels (55 Daily EMA) followed by 0.9775 levels(100 Daily EMA) while immediate resistance is at 0.9975(21 Daily EMA) followed by 1.0030(Middle Daily Bollinger). Exporters are suggested to book Jan and Feb month's exposure towards1.0100 levels, and Importers can cover their exposure on dips. Medium term: Bullish.
Gold: Gold extended trading upwards near 1386.90 levels. Overall the metal had made a low of 1375.90 and a high of 1388.85. Immediate resistance is at $1400 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 80.15 levels after the FED Beige book showed positive signs with all districts showing improvement in the US. Looking ahead today, PPI m/m expected stable at 0.8%, trade balance forecasted at -40.8B and Unemployment claims expected to decline to 405K. 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.