The dollar reversed earlier losses against most major currencies due to spike in U.S. Treasury yields with amid year-end thin liquidity and on risk aversion after disappointing U.S. economic data. December month consumer confidence was a negative surprise coming in 52.5 softer than the expected 56.4. The EUR plummeted to 1.3130 levels after trading as high as around 1.3275. The Yen continues to slip lower to 82.30/32 despite yesterday's comments from various Japanese financial officials that they are monitoring the appreciation of the Yen. The Aussie in early trade continues to probe higher breaking 1.01, rising as high as $1.0153, before retreating to last trade at $1.0092. The Sterling was under pressure against dollar below 1.5400 and GBP/JPY moving to fresh year lows.
EUR/USD: The Euro is currently trading at 1.3129 levels and it had touched low of 1.3082 levels and high of 1.3274 levels yesterday. Looking ahead today, M3 Money Supply y/y, German Prelim CPI m/m and Private Loans y/y. Immediate support comes at 1.3060 levels (21days Daily lower Bollinger) and next 1.2970, while resistance comes at 1.3335 levels (200 Daily EMA) and next 1.3370 levels (100 Daily EMA). EURINR (59.27) exporters cover near 60.00 levels and importers cover for Dec at current levels. EUR/INR is likely to trade in the range of 59.10 - 59.40 today. Short term and Medium term: Bearish.
GBP/USD: The Pound is currently trading at 1.5397 levels and it had touched low of 1.5343 yesterday. Immediate resistance comes near 1.5585(21 Daily EMA) and next 1.5620 levels (200 Daily EMA), while support comes at 1.5280. GBPINR (69.50) Exporters hold for covers and importers cover for December and Jan (40%) at 69.50 levels or below. GBPINR is likely to trade in the range of 69.40 - 69.65 levels today. Short Term and Medium Term: Neutral to slight Bearish.
USD/JPY: USD/JPY is currently trading at 82.28 levels. It had fallen yesterday making a low of 81.81 and a high of 82.54. The Government has been giving more warnings recently due to selling pressure in the currency; there are chances that the government might take action if necessary. Immediate strong resistance is at 83.20 (55 Daily EMA). Yen Exporters are suggested to book Dec and Jan month's exposure on dips and Yen Importers can cover their exposure above 84 levels. Medium Term: Maintain Bearishness for the pair.
AUD/USD: The Aussie is currently trading above the parity levels at 1.0103 levels. Aussie broke the 1.0100 levels yesterday supported by the gains in commodity prices. Overall it had made a low of 1.0076 and a high of 1.0152. Immediate support comes at 0.9953 levels (21 Daily EMA) followed by 0.9857 levels (55 Daily EMA) while immediate resistance is at 1.0183 levels (High of 05.11.2010). Exporters are suggested to book Dec and Jan month's exposure above 1.0100 levels, and Importers can cover their exposure on dips. Medium term: Bullish.
Gold: Gold is currently trading at 1404.10 levels after breaking its recent range as the demand for safe heaven assets increased. Overall the yellow metal had made a low of 1387.35 and a high of 1403.74. Immediate resistance is at $1410 levels followed by $1,431 levels while immediate support comes near $1370 levels. Buying on dips is recommended. Medium term: Maintain bullishness.
DOLLAR INDEX: Dollar Index is currently trading at 80.29 levels. CB Consumer Confidence decline to 52.5 vs. 56.2 forecasted. The gauge of the U.S. dollar has climbed 5.1% since Nov. 3, when the Fed said that it would buy an additional $600 bn. There is a support at 78.83 levels followed by 79.20 levels and resistance is at 80.52 and next 81.50 levels. Holding above 80.50 would be quite 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.