India Forex Advisors / Market Commentary /21_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

The Dollar is trading weak on concern that US would be dragged into the picture if tension between Israel and Iran escalates. Swiss franc was strong last week as alternative save heaven option after reports that Iranian warships would transit the Suez Canal en route to Syria. Euro rallied after Portugal's bond sales as well as hawkish comments from ECB official Bini Smaghi that the ECB's objective is to maintain price stability for the Euro. GBP Retail Sales m/m came out better on Friday at 1.9% vs -1.4% previously and Prelim Mortgage Approvals came out weaker at 41K vs 43K previously. The weekend's G20 meeting made some progress on agreeing to correct imbalances but it seems it went unnoticed by the market as a whole. The Australian dollar slipped 0.2 percent to $1.0130, not helped by Chinese tightening late last week.
Technical Highlights:

EUR/USD: The Eurusd stood firm towards 1.3675 levels after comments from ECB official last week kept alive prospects for the ECB to hike rates before the Fed. Daily stochastic is showing upside momentum with signs of overbought levels. Looking ahead today, German Ifo Business Climate with Eurozone Flash and services Manufacturing PMI. Immediate resistance comes at 1.3700 while immediate support is seen at 1.3630 followed by 1.3490 levels. EURINR (61.77) exporters can cover near 62 levels and very near term importers can cover near 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 was trading at 1.6228 levels near last week's close after a larger than expected jump in January Retail Sales to 1.9% vs. -1.4% previously. Immediate support is at 1.6165 (H4 21 Middle Bollinger and H4 21 EMA) while resistance comes at 1.6262 (H4 21 Upper Bollinger). GBPINR (73.34) Exporters should partially cover at current levels and importers hold for cover near 72.75 levels. GBPINR is likely to trade in the range of 73.20 - 73.50 levels today. Short term: Neutral and Medium term: Bearish.

USD/JPY: The pair is trading near last week's close of 83.09 levels with a strong support seen near 83.03 (100 Daily EMA). All Industries Activity m/m is expected to improve. Daily stochastic showing slightly downside momentum with oversold levels while resistance seen near 83.35 followed by 83.90.Yen importers can cover Feb month's exposure partially at current levels and exporter hold for cover near 82.50 levels. Medium Term: Maintain Bearishness for the pair targeting 80.

AUD/USD: The Aussie started below last week's close of 1.0145, trading near 1.0128 levels post China's rate hike last Friday. Daily stochastic is still showing upside movement with overbought levels and strong resistance is at 1.0185 levels while support at 1.0085 levels. Exporters are suggested to book partially at current levels and Importers can cover their exposure near parity. Medium term: Bullish.

Gold: The yellow metal again rallied to trade near $ 1394 levels, for consecutive sixth session, following the breakout of civil unrest in North Africa. There has been a robust physical demand seen in the yellow metal as a safe heaven. Support for gold is near $1378 levels while immediate resistance is at $ 1400 followed by $ 1413 levels. Medium term: Maintain bullishness.

Dollar Index: DI is currently trading at 77.71 levels down by 0.42% after stocks pushed fresh year highs along with commodities like Oil and Gold surged. Immediate support comes at 77.37 levels (8 hourly 21 Lower Bollinger) while resistance at 78.92 levels ( 8 Hourly 21 EMA) followed by 78.07(8 Hourly 55 EMA) Medium Term: Slight Bullish. Today is U.S. bank holiday.

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.

Join the Discussion