The Dollar traded lower after disappointed employment data. US Unemployment Claims came out weaker at 410K vs 385K previously, Core CPI came out better at 0.2% vs 0.1% previously, and Philly Fed Manufacturing Index came out batter at 35.9 vs 19.3 previously. The Euro is trading above the strong support of 1.35 around the 1.36 levels. EUR Current Account data came out weaker at -13.3B vs -10.5B previously. BOE member Sentence was quoted as supporting interest rate hikes sooner and this led to slight buying of GBP overnight. BOJ released this week its decision about the overnight cash target rate where the board decided to fix the rates at the lowest level between 0 and 0.10%. Canadian dollar jumps to three year high against dollar as focuses are turning back to economic fundamentals.
EUR/USD: The Eurusd inched up towards 1.3606 levels after dollar weakness was seen. Daily stochastic is showing upside momentum with signs of overbought levels. Looking ahead today, German PPI m/m expected stable. 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 (61.47) exporters can cover near 62 levels and very near term importers can cover partially at current levels. EUR/INR is likely to trade in the range of 61.25 - 61.65 today. Short term: Slight bullish and Medium term: Bearish.
GBP/USD: The Pound gains were supported post increase in the CBI UK Industrial Trends survey to 23 vs. 17 along with BOE member Sentence commented to supporting interest rate hikes sooner. Retail Sales m/m is expected stronger as well as BOE Gov King Speech due today. Currently trading near 1.6171 levels, Immediate support is at 1.6115 (21 Middle Bollinger and 21 EMA) while resistance comes at 1.6200 (H4 21 Upper Bollinger). GBPINR (73.08) 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 72.90 - 73.20 levels today. Short term: Neutral and Medium term: Bearish.
USD/JPY: The pair nosedived towards Y83 levels early morning post BOJ Monetary Policy Meeting Minutes where policy board members cautioned about the market's excessive optimism toward the U.S. economy. Strong support seen at 83.00 levels (100 Daily EMA) with the daily stochastic showing downside momentum while resistance seen near 83.56 levels. Yen importers can cover Feb month's exposure partially 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 after being range bound since last few trading sessions breached the resistance levels to trade near 1.0113 levels following the rally in yellow metal. Daily stochastic is showing upside movement and strong resistance is at 1.0200 levels while support at 1.0045 levels. Exporters are suggested to book partially at current levels and Importers can cover their exposure below parity. Medium term: Bullish.
Gold: The yellow metal traded higher for consecutive fourth session at $ 1383.63 levels as Middle East tensions and inflationary pressures increased demand for the safe heaven asset. Support for gold is near $1375 levels while immediate resistance is at 1387 levels. As suggested earlier, Buying on dips is recommended. Medium term: Maintain bullishness.
Dollar Index: DI is currently trading at 77.98 levels down by 0.01% after yesterday's data showed initial claims rise to 410K from the prior week's 385K but was offset by the large spike in February Philly Fed Index which was up 20 points to 35.9. Immediate support comes at 77.69 levels (8 hourly 21 Lower Bollinger) while resistance at 78.22 levels ( 8 Hourly 21 and 55 EMA Medium Term: Slight Bullish. On the data front Fed Chairman Bernanke Speech along with Treasury Sec Geithner Speech 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.