The Dollar to be supported by Geopolitical tensions on the Korean region have popped up again this morning which has served to keep the risk trade on the back burner, as well as by continued debt concerns in the euro zone. The Dollar remained on the front foot with economist upgrading their GDP outlooks for 2011 given the US Tax cut boost. The Euro was slid to a two-week low, trading at 1.3138 after a five-notch downgrade of Ireland's sovereign credit rating by Moody. Finally, EU leaders agreed on a stability mechanism that will be permanent beyond the EFSF. The Sterling moved in line with the Euro, falling to 1.5512 levels after the Irish downgrade with UK banking exposure linking the two currencies. The Yen traded with 83.92 levels at flat note of Y83.90 in late trading on Friday. The Aussies rising 0.2 percent to $0.9895. The South Korean won shed more than one percent to 1,167.90 won per dollar, near a low around 1,170 hit in the wake of North Korea's shelling of a disputed island last month.
EUR/USD : The Euro is currently trading at 1.3139 levels and it touched low of 1.3132 last week after Moody's downgrades Ireland's rating sharply by 5-notches from Aa2 to Baa1. Immediate support comes at 1.3055 levels (21days Daily lower Bollinger) and next 1.2970, while resistance comes at 1.3240 levels & next 1.3380 levels. Looking ahead, Euro-zone Current Account Oct forecast at -6.2b vs.-13.1b and Euro-zone Consumer Confidence Dec forecast at -9 vs.-9.4.EURINR (59.91) exporters cover near 60.40- 60.50 levels and importers cover between 59.25- 59.60 levels. EUR/INR is likely to trade in the range of 59.65 - 60.05 today. Short term and Medium term: Bearish
GBP/USD: The Pound is currently trading at 1.5512 levels and touched low of 1.5474 today morning. Immediate resistance comes near 1.5610 levels (21 Days 4hrly EMA), while support comes at 1.5480 levels and next 1.5280.GBPINR (70.53) Exporters cover near 71.20 - 71.50 levels and importers cover near 70.50 levels. GBPINR is likely to trade in the range of 70.40 - 70.80 today. Short Term and Medium Term: Slight Bearish
USD/JPY: USD/JPY is currently trading at 83.89 levels and is expected range bound ahead of the holiday season. Immediate Support is at 83.75 (100 Daily EMA) followed by 83.55 (21 Daily EMA) while immediate strong resistance is at 84.30 levels (21 Weekly EMA). 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 0.9867 levels. Overall the AUD/USD traded with a low of 0.9839 and a high of 0.9915 before closing at 0.9881 last week. Immediate support comes at 0.9850 levels (21 Daily EMA) followed by 0.9795 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 ($1382.45) had tested the support levels of $1364 last week but was steady and later finished unchanged. Overall the yellow metal had made a low of $1364.65 and high of $1379 before ending at USD$1374.61. Immediate resistance is at $1410 levels followed by $1,431 levels while immediate support comes near $1364 levels. Buying on dips is recommended.Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.52 levels, rebounded after downgrade of Ireland by 5 notches by Moody's last Friday. There is a support at 79.20 levels and resistance is at 80.50 levels. Bias is slightly bullish for Dollar Index. Break of 80.50 and sustaining would be quite bullish for the index. 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.