The Dollar lost ground after data showed initial jobless claims jumped back to 445k. PPI rose strongly by 1.1% mom 4.0% yoy in December while core PPI rose 0.2% mom, 1.3% yoy. Trade deficit came in at USD -38.3b versus consensus of USD -41.2b. The euro jumped about 1.7% against the dollar in its biggest one-day gain since July, after solid euro-zone bond auctions in Spain and Italy that reduced investors' jitters about fiscal troubles in the euro zone. Sterling was higher after the BoE left its key rate unchanged at a record low 0.5% and kept its asset-purchase program on hold at 200 billion pounds. Lower U.S. bond yields helped bring down the dollar to a one-week low of 82.55 against Yen. Australian dollar at 0.9959, made high of 1.002.
EUR/USD: The Euro outperformed and had rose from 1.3100 levels to 1.3383 levels. After keeping rates steady at 1% for the 20th straight month, ECB President Trichet commented on increased risk of inflation through a hawkish tone. Even the Spanish and Italian bond auctions had seen robust demand. Immediate support comes at 1.3305(200 Daily EMA) followed by 1.3265(55 Daily EMA), while resistance comes at 1.3435(Upper Daily Bollinger). Looking ahead today, CPI y/y data expected stable at 2.2%. EURINR (60.20) exporters should cover at current levels and importers cover for Jan partially towards 59 levels. EUR/INR is likely to trade in the range of 60.00- 60.40 today. Short term and Medium term: Bearish.
GBP/USD: The Pound is currently trading at 1.5830 levels after U.K. bank rate was left unchanged at 0.50% and the asset purchase program at ?200bn, with no statement issued. Looking ahead today, PPI Input m/m forecasted better at 1.6% vs. 0.9% previously. Immediate support comes near 1.5745 (Upper Daily Bollinger) while resistance at 1.5945 (100 Weekly EMA). GBPINR (71.48) Exporters should cover at current levels and importers cover partially for Jan towards 70.00 levels. GBPINR is likely to trade in the range of 71.30 - 71.50 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY is currently trading at 82.67 levels. Japanese core machinery orders fell 3% in November. Immediate strong resistance is at 82.95 levels (55 Daily EMA) followed by 83.35(100 Daily EMA) while support is at 81.15 levels (Lower Daily Bollinger). Yen Exporters are suggested to book Jan and Feb month's exposure around 81 levels and Yen Importers 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 0.9960 levels after rallying to 1.0020 levels overnight. Immediate support comes at 0.9915 levels (55 Daily EMA) followed by 0.9780 levels (100 Daily EMA) while immediate resistance is at 1.0030 (Middle Daily Bollinger). Exporters are suggested to book Jan and Feb month's exposure towards 1.0100 levels, and Importers can cover their exposure on dips. Medium term: Bullish.
Gold: Gold extended trading upwards near 1377.24levels. Overall the metal had made a low of 1369.40 and a high of 1393.14. Immediate resistance is at $1390 (Middle Daily Bollinger) followed by $1400 levels while immediate support comes near $1354 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index fell around 1% and is currently trading at 79.22 levels, after data showed initial jobless claims jumped back to 445k. PPI rose strongly by 1.1%. Trade deficit came in at USD -38.3b. Looking ahead today, Retail Sales m/m expected stable at 0.8% while Prelim Consumer Sentiment expected to increase at 75.5. is a support at 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.