Euro: Euro strengthened more than 200 pips in yesterday€™s session touching the highs of 1.2945 (55 Daily EMA). All major stochastic are moving close to the overbought region which could bring a correction of 60-70 pips. However, break of this resistance can take Euro higher to the next resistance zone of 1.3198 (100 Daily EMA & 38.2% Retracement of the fall). On the downside, 1.2670 is an important short term rising trendline support. Shorts could be initiated around 1.2930 for 50 pips. (Eur/Usd:1.2928).
Pound: Cable€™s fall was contained around 1.3700 from where cable strengthened to touch 1.3983 (55 4-hourly EMA) in the late US session yesterday. Currently Cable is trading around 1.3900, with the 4-hourly charts in the overbought region. Immediate resistance comes in at 1.3980 (55 4-hourly EMA) above which is 1.4100 (21 Daily EMA & 100 4-hourly EMA). Initiate shorts around 1.3970 for 70-80 pips. Further shorts can be incorporated around 1.4070 for 100 pips. (Gbp/Usd: 1.3903)
Yen: The Usd/Jpy pair traded in a wide range of about 300 pips as it strengthened from the lows of 95.65. The daily charts are neutral while the 4-hourly chart is getting overbought and is taking the 21 4-hourly resistance at 97.80 currently. Initiate shorts around 98.35 (200 Daily EMA) for 70-80 pips. (Usd/Jpy: 97.71)
Rupee: Rupee opened stronger yesterday with the expectations of dollar inflows in the Indian market. However, it closed flat amid the strong dollar in the overseas market and the weak Indian IIP data released yesterday. The rise in the local shares close to 2.25% could not help the local currency much. Inflation also dipped to 2.43% as against its previous week's 3.03% brining in fresh hopes for the RBI to cut rate. (USD/INR: 51.70)
Swiss Franc: The Usd/Chf pair surged almost 450 pips as it broke past the resistance of 200 Weekly EMA (1.1836) yesterday. It touched the high of 1.1960 indicating weakness in Swissy as the SNB also cut the interest rate by 25 bps. The 4-hourly and hourly charts are overbought and slight correction upto 1.18 levels could be witnessed. The daily and weekly charts continue to give buying signal thus going long around 1.18 levels can be considered. (Usd/Chf:1.1915)
Australian Dollar: Aussie rose to the highs of 0.6577 (55 daily EMA) gaining nearly 165 pips yesterday. The daily & 4-hourly charts are reaching the over-bought region with resistance at 0.6570. Going short around those levels can be considered. On the downside cluster support comes in around 0.6440 which should hold. (Aud/Usd: 0.6531).
Gold: Gold moved almost $25 higher yesterday capping the gains at $930 and finally closing the day at $924. The daily chart is giving buying pressure with the strong support coming in around $890 (rising trend-line). Buying Gold can be considered around $900 for intraday $10-$15. Initial resistance comes in at $929 which if broken can push gold to next resistance of $935 (38% of the fall in the daily chart). (Gold: $923.00)
Dollar index: Dollar Index has weakened and is trading at 87.28 levels with the stochastic indicating further downside at 38.76%.
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.