India Forex Advisors / Market Commentary /25_Feb_2011

By @ibtimes on

Dear Reader,

Global Markets:

The Dollar weakens vs alternative safe heavens as unrest in middle east continues. Mixed data from US provides little support to the greenback. US Core Durable Goods Orders m/m came out weaker at -3.6% vs 3.0% previously, Unemployment Claims came out better at 391K vs 413K previously, New Home Sales came out weaker at 284K vs 325K previously. EUR managed to avoid risk aversion as possible rate hike in the Eurozone continues favouring the currency despite unrest in the Middle East. GBP CBI Realized Sales came out weaker at 6 vs 37 previously. Today Morning, JPY Tokyo Core CPI y/y came out weaker at -0.4% vs -0.2% previously as the Japanese economy is suffering from deflation and the decrease in the export volumes. New Zealand's dollar is strong for second day in a row versus the greenback after Standard & Poor's said the country's ratings is not strongly affected by this week's earthquake which is the deadliest in last 80 years. Crude fell below 100$ per barrel on assurances from the US, Saudi Arabia and the International Energy Agency that they can compensate for any disruption of Libyan shipments. Gold continues to hover above 1400 levels.

Technical Outlook:

EUR/USD: The Eurusd finally broke 1.3800 levels after hawkish comments from ECB member Weber regarding rate hikes. Daily stochastic is showing overbought levels with slight upside movement. Looking ahead today, M3 Money Supply y/y will probably improve to 2.1% while German Prelim CPI m/m expected to increase to 0.5%. Immediate resistance comes at 1.3850 (H4 21 Upper Bollinger) while immediate support is seen at 1.3725 levels, which if breached can move towards 1.3650 levels. EURINR (62.74) exporters can cover partially at current levels for March exposure and importers can cover near 61.50 levels. EUR/INR is likely to trade in the range of 62.55 - 62.95 today. Short term: Slight bullish and Medium term: Bearish.

GBP/USD: The Sterling plunged downside after weak economic data from the economy amid rate hike expectations. CBI Realized Sales declined to 6 while GfK Consumer Confidence also declined to -28. Looking ahead today, Revised GDP q/q which is expected stable at -0.5%. Daily stochastic is still showing downside movement towards oversold region. Immediate support is at 1.6110 (H4 200 EMA) while resistance comes at 1.6175 (H4 21 Middle Bollinger and 21 EMA). GBPINR (73.29) March month's exporters should partially cover above 73.50 levels and importers hold for cover below 72.25 levels. GBPINR is likely to trade in the range of 73.10 - 73.40 levels today. Short Term: Slight Bullish and Medium term: Bearish

USD/JPY: The JPY extended its gains overnight near 81.61 levels due to safe heaven flows. Daily Stochastic is showing oversold levels with slight downside movement. National Core CPI y/y came out better to -0.2% vs. -0.3 expected. Immediate Support is at key 81.50 levels (H4 21 lower Bollinger) while immediate strong resistance is at 82.35 levels (21 H4 EMA) followed by 82.75 (55 Daily EMA). Yen Exporters are suggested to book March month's exposure partially at current levels and Yen Importers can cover their exposure towards 82.50 levels. Medium Term: Maintain Bearishness

AUD/USD: The Aussie rallied for consecutive two sessions and is hovering near 1.0120 levels. Daily stochastic is at neutral levels with an upside movement with strong key resistance is at 1.0200 levels (21 Daily Upper Bollinger) and support at 1.0085 levels. Exporters are suggested to book March month exposure partially near 1.0150 levels and above while Importers can cover their exposure near 0.9950 levels. Medium term: Bullish.

Gold: The metal slide downwards after more than one week's rally, trading near $ 1403.80 levels and making a high at $ 1418.20 levels yesterday. Heavy profit booking was seen in the yellow metal. Immediate support for gold is near $1400 levels followed by $ 1391 while immediate resistance is at $ 1414 followed by 1431.28(05/12/2010) levels. Medium term: Maintain bullishness.

Dollar Index: The US dollar index is trading at 77.00 levels, down by 0.05%. Greenback was more focused on oil price movement amid Middle East tensions. Weekly Jobless Claims fell to 391k vs. 410k previously while Crude Oil Inventories fell by 0.1MB. Today, Prelim GDP q/q forecasted to improve at 3.3% while UoM Consumer Sentiment expected to remain near 75.5 levels. Immediate support comes at 76.65 levels (4 hourly lower Bollinger) while resistance at 77.37 levels (4 Hourly 21 EMA). 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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