The U.S. dollar rose to its highest level against the euro in two weeks, extending gains after the ECB released data showing it sharply reduced purchases of European government bonds in the latest week. Also weighing on the euro, the European Commission said that its preliminary consumer-confidence indicator for the 16-nation euro zone fell in December for the first time in six months. The euro traded at $1.3173 and fell as far as $1.3094, its weakest level since the beginning of the month, under pressure as news flow continued to be negative with Moody's placing 30 Spanish Banks on review for downgrade. Also concerning is analysts focusing on the French AAA rating and the possibility that it may be lost in 2011. The Yen little changed versus the dollar at 83.64 yen, as expected BOJ kept call rate unchanged at 0.10%. The Aussies outperformed all currencies and the high yielding commodity currency shrugging off the European worries. The Swiss franc pressed to an all-time high against the euro.
EUR/USD: The Euro is currently trading at 1.3169 levels and it touched low of 1.3094 levels yesterday. 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. EURINR (59.68) exporters cover near 60.20- 60.50 levels and importers cover between 59.25- 59.55 levels. EUR/INR is likely to trade in the range of 59.50 - 59.90 today. Short term and Medium term: Bearish.
GBP/USD: The Pound is currently trading at 1.5545 levels. Immediate resistance comes near 1.5636 levels (200 Days daily EMA), while support comes at 1.5480 levels and next 1.5280. GBPINR (70.45) Exporters cover near 71.20 - 71.50 levels and importers cover between 70.20 -70.50 levels. GBPINR is likely to trade in the range of 70.35 - 70.70 today. Short Term and Medium Term: Neutral to Bullish.
USD/JPY: USD/JPY is currently trading at 83.66 levels and was quiet yesterday focusing on North Korean Tensions. Looking ahead Monetary Policy Statement due today. Immediate Support is at 83.27 (55 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 and Yen Importers can cover their exposure above 84.30 levels. Medium Term: Maintain Bearishness.
AUD/USD: The Aussie is currently trading at 0.9965 levels. Overall the AUD/USD traded with a low of 0.9862 and a high of 0.9973. CB Leading Index m/m was 0.6% vs. Previous -0.2%. Immediate support comes at 0.9865 levels (21 Daily EMA) followed by 0.9800 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 ($1386.70) was hovering near the 21 Daily EMA levels of 1384.36. It rose yesterday after speculations that ratings of France and Belgium are at risks. Overall gold traded yesterday with a low of $1375 and high of $1388. Immediate resistance is at $1410 levels followed by $1,431 levels while immedite support comes near $1364 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.36 levels. US Chicago Fed activity index fell back a touch to -0.46 in November from an upwardly revised -0.25 vs. -0.28 previously. 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.