India Forex Advisors / Market Commentary /30_Mar_2011

By @ibtimes on

Dear reader,

Global Markets:
The Dollar is stable today by hawkish comments on normalization of monetary policy and cutting QE2 program by $100bln. Yesterday US CB Consumer Confidence came out weaker at 63.4 vs. 72.0 previously. GfK German Consumer Climate came out neutral and German Prelim CPI m/m came out better at 0.5% vs. the expectation of 0.4%. The Sterling remains weaker as expectation of BOE hike shifted from May to August. GBP Current Account came out weaker at -10.5B vs. -8.7B previously and Final GDP q/q came out better at -0.5% vs. -0.6% previously. Asian stocks rose as Japanese companies resumed production after the March 11 earthquake and tsunami. The Yen was strong pushing to pre-earthquake levels above 82.JPY Prelim Industrial Production m/m came out better at 0.4% vs. expectation of -0.1%. Japan's factory output climbed 0.4 percent in February from January, climbing for a fourth month straight. South Koreas GDP grew 0.5 percent in the fourth quarter of 2010 from the previous three months. NZD Building Consents m/m came out weaker this morning at -9.7% vs. 9.1% previously.

Technical Outlook:

EUR/USD: Euro (1.4082) consolidated after FED Bullard commented that QE2 program maybe be cut short by $100bln. Immediate resistance is at 1.4112 (4hrly 21 Middle Bollinger) while immediate support is seen at 1.4029 levels (4hrly 100 EMA). Daily Stochastic is at oversold levels with slight upside movement expected for the day. EURINR (63.00): Exporters can cover partially at current levels for April exposure while importers can cover near 62.65 levels and further on dips. EUR/INR is likely to trade in the range of 62.75 -63.25 levels today. Short term: Slight bullish and Medium term: Bullish.

GBP/USD: Sterling (1.5984) was under selling pressure as expectation of BoE hike shifted from May to August in recent weeks. GBP CBI Realized Sales data is expected today to be weaker at -1. Support is seen near 1.5923 (Daily Lower Bollinger) followed by 1.5847 (200 days Daily EMA) and resistance is seen near 1.6028 (4hrly 21 Lower Bollinger) followed by 1.6085 (55days Daily EMA). GBP/INR (71.52) exporters should cover near 72.00 regions and short term importers can cover near 71.35 levels and below. GBPINR is likely to trade in the range of 71.35 to 72.75 levels today. Short Term: Slight Bullish and Medium term: bullish

USD/JPY: The pair rose towards Y83 areas i.e. towards pre earthquake levels after hawkish comments from a Fed member that they may close the QE2 program early. As said yesterday, slight upside movement is still expected with strong resistance is seen at 83.33 and 83.61 regions while downside movement will be supported near 82.40 - 82.00 regions. Yen Exporters are suggested to book exposure partially near 82.25 levels and below while Yen Importers can cover their exposure near 83.00 - 83.35 areas and above. Short term Bearish

AUD/USD: The commodity currency was very strong and resumed rallying back to the 1.0300 resistance key levels followed by 1.0331 regions. Support is seen near 1.0235 - 1.0255 areas which if broken can take the pair towards 1.0190 areas. Exporters are suggested to book exposure partially at current levels while Importers can cover their exposure near 1.01200 regions. Short Term: Bullish Medium term: Bullish.

Gold: The metal ($ 1416) was trading in a consolidated range near 1412 - 1418 regions. It touched a high at $ 1423 levels and daily Stochastic is reaching oversold levels. Support regions are strong at 1408 - 1409 levels while Resistance is seen near 1419 - 24 areas. Medium term: Bullish.

Dollar Index: The dollar was softer and equities were higher despite hawkish comments from Fed members and more ratings downgrades in the Euro zone periphery. Meanwhile, CB Consumer Confidence declined to 63.4 on the sharp hike in Fuel prices. Support is at 76.05- 76.15 regions while immediate resistance is at 76.55 and further towards 76.72 regions. Short Term: Bearish and Medium Term: Bullish. Today, ADP Non-Farm Employment Change is expected to decline.

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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