Safe haven instruments were in strength as Japan and Bahrain situation kept investors on edge. PPI m/m came out better at 1.6% vs. 0.8% previously and Core PPI m/m came out neutral as expected at 0.2%. EUR struggled under risk aversion pressure and finds support around 1.3900 levels. EUR CPI y/y came out neutral at 2.4%. The Yen soared to a record high at 76.43 vs. the Dollar. JPY bond rises as yen appreciated to post World War 2 high which will hamper an economic recovery of Japan. Swiss franc made new record highs against the Dollar as safe haven inflows continued to dominate. Asian markets again fell this morning on the nuclear plant crisis concern in Japan. Gold and silver dropped as some investors sold precious metals to cover losses in commodities and equities.
EUR/USD: Euro was unable to sustain 1.4000 levels after Moody downgraded Portugal by two notches to A3 with negative outlook yesterday, pushing Portuguese 10yr government bond yields 9bp higher. Immediate resistance is at 1.3941 levels (H4 Middle Bollinger) while Immediate support is seen at 1.3893 (Daily 23.6% Fibo) followed by 1.3850 levels. EURINR (63.01) exporters can cover partially at current levels for March exposure and Importers can cover partially near 62.65 levels. EUR/INR is likely to trade in the range of 62.80 - 63.20 levels today. Short term: Bullish and Medium term: Bearish. Looking ahead, Swiss Libor Rate forecast to remain at 0.25%.
GBP/USD: GBP has witnessed selling pressure since last few sessions and is trying to hover near the key 1.6000 levels. Immediate strong support comes at 1.5951 levels (100 daily EMA) and resistance is seen near 1.6050 levels (55 daily EMA). GBP/INR (72.43) March month's exporters should cover partially near 72.85 levels and importers cover near 72.25 levels. GBPINR is likely to trade in the range of 72.25-73.60 levels today. Short Term: Bullish and Medium term: Bearish
USD/JPY: The pair finally broke through Y77 levels and made a low at 76.43 levels and reversed back amid fears of government intervention with market more focused over nuclear incident. Immediate resistance is at 79.29 levels followed by 80.87 while immediate strong support is at 78.09 levels. Yen Exporters are suggested to book March month's exposure at current levels while Yen Importers can cover their exposure near Y81 levels and above. Medium Term: Maintain Bearishness
AUD/USD: The Aussie underperformed against majors and tested support levels at 200 daily EMA near 0.9712 levels and reversed back to trade near 0.9806. Fall in commodities pressured the Aussie downside. Resistance is seen near 0.9894 levels (Daily 21 lower Bollinger) followed by 0.9955 levels. Exporters are suggested to book March month exposure towards parity, while Importers can cover their exposure partially at current levels. Medium term: Bullish.
Gold: The yellow metal hovered near $ 1393 levels and was volatile with some pressure as safe haven buying was seen in Swiss franc and Yen. Meanwhile resistance comes at $ 1398.53 and 1405 levels while support is at 1380.62 levels. Medium term: Bullish.
Dollar Index: The US dollar index is currently trading near 76.44 levels, down by 0.31% after Dow Jones fell by 200pts. Immediate support is at 76.28 levels while immediate resistance is at 76.57 levels followed by 76.69 levels. Short Term: Bearish and Medium Term: Bullish. Looking ahead today, Philly Fed Manufacturing Index along with Core CPI m/m and Unemployment Claims due today.
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.