India Forex Advisors / Market Commentary /23_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

Dollar is weak even though US CB Consumer Confidence came out better at 70.4 vs. 64.8 previously and Euro rallied upwards after ECB council member Mersch's hawkish comments regarding upside risks to price stability and inflation concerns. EUR GfK German Consumer Climate and Belgium NBB Business Climate came out better than expected. GBP Public Sector Net Borrowing came out better at -5.3B vs. 14.5B previously. JPY Trade Balance came out weaker at 0.19T vs. 0.58T previously. Yesterday Moody lowered Japan's debt rating outlook from stable to negative as economic and fiscal policies were not proving strong enough to achieve the government's deficit reduction target. Aussie and Loonie are weak in spite of strong commodity prices. Kiwi is the weakest currency this week because of earthquake in Christchurch. Market is concerned that the earthquake will add further burden to the economy.

Technical Highlights:

EUR/USD: The Eurusd touched higher 1.3702 yesterday. Looking ahead today, Eurozone Industrial New Orders M/M Dec expected -1.00% vs 2.10%. Immediate resistance comes at 1.3760 while immediate support is seen at 1.3644 levels. EURINR (61.98) exporters can cover above 62.10 levels and very near term importers can cover near 61.20 levels. EUR/INR is likely to trade in the range of 61.80 - 62.10 today. Short term: Slight bullish and Medium term: Bearish.

GBP/USD: The Sterling (1.6168) has risen from its low of 1.6101. The BOE minutes release is due today which might cause volatility in market. Daily stochastic is showing downside. Immediate support is at 1.6084(Daily 21 Middle Bollinger) while resistance comes at 1.6278 (21 upper Bollinger in daily chart). GBPINR (73.22) Exporters should partially cover near 73.40 levels and importers hold for cover below 72.50 levels. GBPINR is likely to trade in the range of 73.10 - 73.35 levels today. Short term: Neutral and Medium term: Bearish.

USD/JPY: The JPY strengthened to trade near 82.62 levels after some safe haven flows due to risk aversion. Yesterday Moody gave a negative outlook. Merchandise Trade Balance showed first deficit in 22 months at 0.19T during January on stronger Yen. Immediate Support is at 82.35 (50% Daily Fibo) while immediate strong resistance is at 82.80 levels (200 H4 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 83.20 levels. Medium Term: Maintain Bearishness.

AUD/USD: The Aussie failed to sustain the break below the parity and has bounced back from its low of 0.9965. The broader bullish sentiment remains intact. The important Support level at 0.9860(21-Weekly EMA) to watch on the downside. Broadly the pair has been ranged between 0.9860 to 1.0200 levels. Exporters are suggested to book partially above 1.0100 levels and Importers can cover their exposure on dips. Medium term: Bullish.

Gold : The yellow metal was hovering near $ 1400 levels after some profit booking. Global concerns still weighed on the safe heaven metal. Overall it traded with a low of $1392 and high of $1406.50 yesterday. Immediate resistance is at $1410 levels while immediate support comes near $1396 levels followed by $ 1383 levels. Daily Stochastics is showing downside movement. Medium term: Maintain bullishness.

Dollar Index: The US dollar index is currently trading at 77.69 levels down by 0.15% despite better consumer confidence and manufacturing data yesterday. Market will be focused on Existing Home Sales data which is expected to show stable signs near previous 5.28 M. Immediate support comes at 77.43 while resistance at 77.87 followed by 78.00 levels. 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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