India Forex Advisors / Market Commentary /17_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

The dollar is traded lower on news that Israel said two Iranian warships planned to sail through Suez Canal on route to Syria, However Suez Canal Authority said that no Iranian warships have passed through the canal. %. PPI m/m came out weaker at 0.8% vs 0.9% previously, and Industrial production m/m came out weaker at -0.1% vs 1.2% previously. FOMC minutes released yesterday showed that members are more confidence that economic recovery would be sustained but the board is still unsatisfied with the pace of improvement in labour markets. Growth projection for 2011 was raised from 3-3.6% to 3.4-3.9%. Unemployment rate was forecast to be at 8.8-9.0% in Q4, slightly lower than prior estimate of 8.9-9.1. Euro rallied after talk of sovereign buying. The BoE inflation report raised inflation and lowered growth forecasts disappointing the market's hawkish expectations. Cable Claimant Count Change came out weaker at 2.4K vs -3.4K previously. Swiss Franc also appreciated as an alternative safe heaven. Aud New Motor Vehicle Sales m/m came out weaker at -1.9% vs 1.0%.

Technical Outlook:

EUR/USD: The Eurusd rallied towards 1.3587 levels after solid support was seen near 1.3500 levels on continuous talk of sovereign buying. Daily stochastic is showing upside momentum. Looking ahead today, Current Account data expected better. As mentioned earlier, If Euro stays below 1.3510 levels, we expect further downside towards 1.3425 levels. Immediate resistance comes at 1.3635(21 Daily Middle Bollinger) while immediate support is seen at 1.3565 followed by 1.3485 levels. EURINR (61.73) exporters can cover partially near 62 levels and very near term importers can cover below 61.35 levels. EUR/INR is likely to trade in the range of 61.55-61.95 today. Short term: Slight bullish and Medium term: Bearish.

GBP/USD: The Pound trading near 1.6108 levels had fallen towards 1.60 levels overnight after soft jobs data yesterday with 2.4k vs. -3k forecast. Also the BOE quarterly inflation report disappointed markets who were looking for more support for a rate rise this year. Looking ahead today, MPC Member Sentance Speech. Immediate support is at 1.6040 (100 Middle Bollinger) while resistance comes at 1.6175 (H4 21 Upper Bollinger). GBPINR (73.16) Exporters should partially cover at current levels and importers hold for cover near 72.25 levels. GBPINR is likely to trade in the range of 73.00 - 73.30 levels today. Short term: Neutral and Medium term: Bearish.

USD/JPY: The pair rose towards Y84 levels early morning post FOMC minutes which had discussed about the inflation risks. Currently it is trading at 83.60 levels. Strong support seen at 83.00 levels with the daily stochastic showing overbought levels while resistance seen near 83.90 levles. Yen importers can cover Feb month's exposure at current levels and exporter hold for cover near 82.75 levels. Medium Term: Maintain Bearishness for the pair targeting 80.

AUD/USD: The Aussie has been range bound since last few trading sessions and currently it is trading at 1.0038 levels, near 21 Daily middle Bollinger resistance. Daily stochastic is showing upside movement and strong resistance is at 1.0065 levels while support at parity levels. Exporters are suggested to book partially above 1.0050 levels and Importers can cover their exposure on dips. Medium term: Bullish.

Gold: The yellow metal inched up towards $1377 for consecutive three sessions as the rise in inflation levels globally enhanced demand on the shiny metal. Support for gold is near $1370 levels while immediate resistance is at 1380 levels. As suggested earlier, Buying on dips is recommended. Medium term: Maintain bullishness.

Dollar Index: DI is currently trading at 78.13 down by 0.24%. Yesterday's FOMC Minutes showed some improvement on the economic growth outlook but concerns still remained on unemployment. Immediate support comes at 77.95 levels while resistance at 78.25 levels Medium Term: Slight Bullish. On the data front Philly Fed Manufacturing Index expected better while Unemployment Claims expected weaker.

DISCLAIMER
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.

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