India Forex Advisors / Market Commentary /22_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

Risk Aversion was evident due to Geopolitical tensions and unrest in the Middle East leading to strength in safe haven currency i.e. Dollar ant the commodities. The US dollar index is slightly higher on safe haven buying. The Euro is currently trading below 1.3600 levels. EUR tumbles due to Middle East unrest despite of positive Euro zone data yesterday. German Flash Manufacturing PMI came out better at 62.6 vs. 60.5 previously and German Ifo Business Climate came out better at 111.2 vs. 110.3 previously. The Asian currencies are trading weaker. Crude Oil climbed to the highest level in more than two and a half years. Japanese debt against default increased after Moody's Investors Service changed the nation's debt-rating outlook to negative, thus Yen is trading weaker. The 10 yrs Treasury yields dropped to the lowest level in two weeks.

Technical Highlights:

EUR/USD: The Eurusd slipped towards 1.3580 levels despite German IFO improved to record highs in February to 111.2 vs. 110.3 previously. Looking ahead today, GfK German Consumer Climate is likely to improve. Immediate resistance comes at 1.3640 while immediate support is seen at 1.3528 levels. EURINR (61.34) exporters can cover above 61.80 levels and very near term importers can cover near 61.00 levels. EUR/INR is likely to trade in the range of 61.20 - 61.55 today. Short term: Slight bullish and Medium term: Bearish.

GBP/USD: The Pound also went down due to the dollar's strength and it is currently trading at 1.6155 levels. Daily stochastic showing downside movement . Immediate support is at 1.6065(Daily 21 Middle Bollinger) while resistance comes at 1.6280 (21 upper Bollinger in daily chart). GBPINR (72.95) Exporters should partially cover above 73.00 levels and importers hold for cover below 72.50 levels. GBPINR is likely to trade in the range of 72.85 - 73.15 levels today. Short term: Neutral and Medium term: Bearish.

USD/JPY: The pair had found support near Y83 levels and was trading near 83.30 levels. Daily stochastic showing slightly upside momentum near the oversold levels with resistance seen near 83.62 followed by 84.14. 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 nosedived towards 1.0025 levels, unable to find support from surge in commodity prices. NAB Quarterly Business Confidence declined to 5. Daily stochastic is showing downside movement and strong resistance is at 1.0200 levels with support at 0.9980 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 spiked above $ 1400 levels for consecutive seventh session after making a high at $ 1411.15, following the increasing political up rise in the Middle East. There has been a robust physical demand seen in the yellow metal as a safe heaven. Immediate support for gold is near $1400 levels followed by $ 1391 while immediate resistance is at $ 1411.15(21/02/2011) levels. Medium term: Maintain bullishness.

Dollar Index: The US dollar index is slightly higher on safe haven buying, currently trading at 78.41 levels up by 0.54%. Market will be focused on CB Consumer Confidence which is going to improve along with Richmond Manufacturing Index which is expected stable. Immediate support comes at 78.02 levels (8 hourly 55 EMA) followed by 77.86 (8 hourly 21 EMA) while resistance at 78.32 levels (8 Hourly 21 Upper Bollinger). Medium Term: Slight Bullish.

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.

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