Risk appetite was dented on Eurozone concerns with Spain warned by Moody's it may lower the countries rating. The dollar boosted by selloff in bonds and strong rally in treasury yield. The Euro was under much pressure against the dollar and made new record low against Swissy after Moody's said in a report that it may downgrade Spain's credit rating, which currently stands at Aa1, as the country's 'substantial funding requirements, not only for the sovereign but also for the regional governments and the banks. Looking ahead, EU Economic Summit day 1 and ECOFIN Meetings. The Sterling was even worse than Euro, falling from 1.5770 to 1.5550 against dollar as unemployment rate unexpectedly jumped from 7.7% to 7.9% in October. Unemployment rose by 35,000 in the three months to October The Canadian dollar was relatively resilient as crude oil jumped after much sharper than expected drop in crude oil inventory by -9.9m. The Aussies was sold steadily throughout the day with both USD strength and increasing risk aversion.
EUR/USD: The Euro is currently trading at 1.3212 levels and it fell 150 pips yesterday after Moody said in a report yesterday that it may downgrade Spain's credit rating. Immediate support comes at 1.3180 levels and next 1.2970, while resistance comes at 1.3350 levels & next 1.3440 levels. EURINR (60.20) - Importers can cover near 59.50 levels. Exporters are suggested to book near term exposure near 60.20 - 60.40 levels. Short term and Medium term: Bearish. EUR/INR is likely to trade in the range of 60.00 - 60.40 today.
GBP/USD: The Pound fell 220pts yesterday after the weak unemployment rate; it is currently trading at 1.5548 levels. Immediate strong resistance comes near 1.5740 levels (100 days 4hrly EMA), while support comes at 1.5480 levels. GBPINR (70.81) Importers can cover partially on dips (70.50) levels. Short Term and Medium Term: Neutral. GBP/INR is likely to trade in the range of 70.65 - 71.00 today.
USD/JPY: USD/JPY is currently hovering around 21 Weekly EMA levels of 84.22 levels after yesterday's weak Japanese Tankan survey. The manufacturing conditions index fell 3 pts to 5 in the December quarter while the non-manufacturing conditions index fell 1pts to 1. Immediate Support is at 83.75 (100 Daily EMA) followed by 83.55 (21 Daily EMA) while immediate strong resistance is at 84.30- 84.52 (21 Bollinger band). Yen Exporters are suggested to book Dec and Jan month's exposure on dips near 82.50 levels and Yen Importers can cover their exposure above 84.30 levels. Medium Term: Maintain Bearishness.
AUD/USD: The Aussie is currently trading at 0.9865 levels. It had fallen from 0.9958 to 0.9840 yesterday. MI Inflation Expectations came at 2.8%, lower than previous at 3.1%. Immediate support comes at 0.9840 levels (21 Daily EMA) followed by 0.9785 levels (55 Daily EMA) while immediate resistance is at 1.0000 levels. Exporters are suggested to book Dec and Jan month's exposure above the parity levels, and Importers can cover their exposure on dips (0.9750 - 0.9850 levels). Medium term: Bullish
Gold: Gold ($1380.72) had declined and had broke key support at $1387 yesterday. Yellow metal had slipped to a two day low yesterday at around $1377 levels after Moody's warning over Spain's Aa1 debt for a possible downgrade. Overall it traded with a low of $1377 and high of $1396 yesterday. Immediate resistance is at $1410 levels followed by $1,431 levels while immediate support comes near $1364 levels. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.24 levels, rebounded after firm U.S. data released yesterday along with Eurozone debt concerns. Core CPI m/m 0.1% as expected while crude oil inventories fell to -9.9MB, then previous at -3.8MB. Looking ahead today Unemployment Claims expected 421K as previous and Philly Fed Manufacturing Index. There is a strong support at 79.20 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.