Dollar looks positive as risk aversion continues. The Euro weakened against the dollar after Enda Kenny the leader of Ireland's Fine Gael party said he will push for the quick formation of government and the renegotiation of an international bailout. Renegotiation of bailout is negative news for Euro. Asian stocks fell on growing unrest through the Middle East and North Africa, thus slowing down the global economic recovery. Yen was biggest gainer last week, JPY Manufacturing PMI came out better at 52.9 vs 51.4 previously, Prelim Industrial Production m/m came out weaker at 2.4% vs 3.3% previously, Retail Sales y/y came out better at 0.1% vs -2.1% previously. China's annual growth target of 7 percent for the 12th Five-Year Plan (2011-2015) is set to ensure sustainable growth. Gold advanced as tensions in the Middle East boosted oil prices increasing demand for precious metals as a protector of wealth and hedge against inflation. Oil rallied again after Middle East crisis has spread to Oman further raising concern that Middle East oil production may be affected more.
EUR/USD: The Eurusd traded flat near last week's closing levels of 1.3750 levels and was more focused on this week's various bond auctions from various countries in Eurozone. Daily stochastic is showing overbought levels with downside movement. ahead today, CPI y/y expected stable at 2.4% with Belgium Bond auction due. Immediate resistance comes at 1.3850 (Daily 21 Upper Bollinger) while immediate support is seen at 1.3660 levels. EURINR (62.25) exporters can cover partially near 62.80 levels for March exposure and importers can cover near 62.00 levels. EUR/INR is likely to trade in the range of 62.10 - 62.40 today. Short term: Slight bullish and Medium term: Bearish.
GBP/USD: The Sterling nosedived from the last week's closing levels to trade near 1.6085 levels after GDP Y/Y Q4 came weaker amid rate hike expectations. Daily stochastic is showing downside . Immediate support is at 1.6000 (Daily 21 Lower Bollinger) while resistance comes at 1.6110 (H4 100 EMA). (72.86) March month's exporters should cover near 73.25 levels and importers cover below 72.50 levels. GBPINR is likely to trade in the range of 72.70 - 73.00 levels today. Short Term: Slight Bullish and Medium term: Bearish
USD/JPY: The JPY was hovering flat near last week's close at 81.68 levels with Retail Sales y/y and Manufacturing PMI improving. Daily Stochastic is showing oversold levels with slight upside movement. National Core CPI y/y came out better to -0.2% vs. -0.3 expected. Support is at key 81.35 levels (Daily 21 lower Bollinger) while immediate strong resistance is at 82.15 levels (21 H4 EMA and Middle Bollinger). Exporters are suggested to book March month's exposure partially at current levels and further on dips while Yen Importers can cover their exposure towards 82.50 levels. Medium Term: Maintain Bearishness
AUD/USD: The Aussie declined, trading near 1.0145 levels after rallying for three consecutive sessions last week with Company Operating Profits q/q declining. Daily stochastic is at overbought levels with a slight upside movement with strong key resistance is at 1.0210 levels (21 Daily Upper Bollinger) and support at 1.0090 levels. are suggested to book March month exposure partially near 1.0150 - 1.0200 levels and above while Importers can cover their exposure near 0.9950 levels. Medium term: Bullish.
Gold: The metal further extended its gains towards $1413.30 levels as heavy flows were still seen in the safe heaven asset due to Middle East worries. Immediate support for gold is near $1406 levels followed by $ 1400 while immediate resistance is at $1419 followed by $1431.28(05/12/2010) levels. Medium term: Maintain bullishness.
Dollar Index: The US dollar index bounced from the trend support at 76.95 levels, trading at 77.21 levels up by 0.29%. Today, Chicago PMI expected lower and Pending Home Sales m/m are expected lower. support comes at 77.00 levels (H4 lower Bollinger) while resistance at 77.34 levels (H4 21 EMA) followed by 77.50 levels. Medium Term: Slight 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.