Indian Rupee has again breached the 50 mark against the dollar plunging it to a multi-month low of 50.48, as the S&P downgrade of sovereign outlook and signs of deepening recession made global investors jittery about investing in Indian assets. Weekly Wholesale Price Index was shown at 3.36%. Tim Geither has revealed the assumptions for the banking stress test which includes an unemployment rate averaging 8.9% in 2009 and 10.3% in 2010, a 3.3% contraction in gross domestic product and home-price declines of another 22% .However optimism may be limited as U.S. durable goods orders are forecasted to have fallen by another 2.5% in January after the 3.0% decline the month prior. The deepening recession has caused consumers to put off purchases of long lasting items. Americans are no longer able to pull money out of their homes to buy bigger ticket items as home prices in December realized an annualized drop of 18.5%. Existing home sales unexpectedly fell 5.3% in January demonstrating the consumer’s willingness to wait for lower prices. Therefore, we could see a steeper than expected drop in demand which would lower growth expectations for the U.S. economy and could send stocks lower and the dollar higher. Initial jobless claims over 600,000 and another drop in new home sales would add to the pessimistic outlook. Euro found support during overnight trading as equity markets traded higher on the news that UBS AG replaced its chief executive officer and the U.K. government extended guarantees on bank assets. The single currency would reach as high as 1.2790 before finding resistance as weak sentiment readings have capped gains. Economic confidence in the region dropped to a record low of 65.4 from a revised lower January print of 67.2, signaling that further weakness is ahead for the economy as businesses and consumer continue to retrench. Meanwhile, Germany, the regions largest economy, saw a rise in unemployment by 40,000 as companies continue to slash payroll in anticipation of the further weakness. The Euro continues to be correlated to risk winds and if the developments in the U.S. and the U.K. help lift equity markets then we may see the Euro regain its footing and look to test yesterday’s high of 1.2900. However the dour fundamental data only increase the chance of further easing by the ECB which could weigh on the single currency and send it lower with 1.2500 as support below. BoE governor Mervin King speaking at the UK Treasury Committee Hearing on the Banking Crisis said that the government needs to bolster confidence in banking system. Indeed, the extension of guarantees on banks assets was one measure that the government has already employed in this cause. The government has pledged top guarantee toxic assets which has banks shares soaring on the day. Royal Bank of Scotland Group Plc announcing that it would put 325 billion pounds of investments into a state insurance program and shift toxic assets to a new unit after posting the biggest loss in British history sending. However comments from Mervyn King that the central bank will have to increase money supply have stalled bullish price action. The yen fell against the dollar and weakened versus the euro before government reports tomorrow that may show rising unemployment and falling consumer prices in Japan.
Thursday, February 26, 2009
Evening Report-26.
Wednesday, February 25, 2009
Japanese Yen continued to be very weak-Feb 26.
Technical Outlook:
R1: 98.65 S1:97.02
R2: 98.86 S2:96.69
Yen chart pattern indicates a bullish crossovers for the day . Trading range for the day is expected between 97.10 – 98.58 levels . Momentum are seen trending up and currency is seen trading above the moving average giving indication of a bull run . Parabolic is also supported the same
Euro and sterling fell after stocks ran-Feb 26.
R2: 1.2820 S2:1.2640
Chart pattern hints sideways to bull note for the day . Trading range for the day is expected between 1.2680-1.2790 levels for the day. Currency is trading between the fast and slow moving average giving sideways direction .Momentum indicators are pointing up giving room for small upward correction.
R2: 1.4660 S2: 1. 4440
Chart pattern signals a bullish movement for the day. Trading range is expected between 1.4180-1.4340 levels for the day. Momentum and stochastic are seen trending up giving bullish signals but Currency is trading below the the moving average and parabolic is also giving a caution.
Indian Rupee opened weaker on higher oil prices-Feb 26.
Evening Report-Feb 25.
Indian Rupee was largely steady in afternoon trade as gains in the local share market helped calm concerns of rising outflows, but some dollar demand from importers prevented a sharp rally. One-month offshore non-deliverable forward contracts were quoting at 50.01/11, weaker than the onshore spot rate, indicating a bearish near-term outlook. Despite brief bout of risk appetite which sent the dollar lower traders remain cautious which is returning support for the greenback. Chairman Ben Bernanke’s eased bank nationalization fears in his testimony to Congress but the impact of his comments have lessoned as weak fundamental data from Asia and Europe remind markets that the global downturn is deepening. The existing home sales report is expected to show that a slight increase as home prices falling 18.55% has started to bring buyers to the markets. However tight credit markets remain a barrier and could lead to a lower than expected print. President Obama in his address to Congress pledge the government commitment to boost lending which may raise hopes that the housing crisis could bottom in the near-term. Any significant increase in risk appetite should sink the dollar with its existing strong correlation to equity markets. The Euro reached as high as 1.2900 before final German GDP figures confirmed the country’s largest contraction in 22 years. Although the reading was in line with expectations, the sharp lower revision in exports to -7.3% from -0.2% raised concerns of future growth. The German economy is dependent on demand for its products and the deteriorating global demand is expected to continue to weigh on the economy. The Euro/Dollar has continued to remain range bound between 1.2500 and 1.3000 and with lingering banking concerns and an expected rate cut from the ECB we could see the single currency look to test the lower levels of the range going forward. Japanese yen fell against the dollar as a rebound in equities boosted investors' risk appetite. Additionally, bleak economic reports from Japan aggravated the weakness of yen .A government data released today showed that Japan logged its biggest-ever trade deficit in January, totaling 952.6 billion yen, with exports falling a record 45.7 percent, reflecting the severity of the global economic slowdown. Pound fell after the second reading of 4Q U.K. GDP confirmed that the country experienced its worst three month period of growth since 1980. Sterling had reached as high as 1.4600 before erasing its gains on the back of the bout of risk appetite that started in the U.S. markets. Although U.K. GDP figures remain unchanged at -1.5% versus expectations of a revision lower to -1.6%, weaker private spending figures raised concerns over future domestic growth. Additionally, the service sector which accounts for 70% of GDP also fell to -0.9% from -0.5%. The weaker consumption and service sector data will squash any hopes that U.K. domestic growth could rebound in the near-term. Therefore, the BoE is expected to lower their benchmark rate by 50 bps at their March 5th meeting with quantitative easing to follow as it attempts to spur growth. Meanwhile a report out of the E.U. has warned that the pound’s weakness against the Euro could destabilize the U.K. economy which contradicts Gordon Brown’s contention that it is beneficial as it would boost demand for exports.
Tuesday, February 24, 2009
Yen’s Haven Allure Fades as Japanese Economic Slide Worsens -feb 25
R1: 97.80 S1:96.10
R2: 97.90 S2:96.00
Yen chart pattern indicates a bullish crossovers for the day . Trading range for the day is expected between 96.20 – 97.70 levels . Momentum are seen trending up and currency is seen trading above the moving average giving indication of a bull run . Parabolic is also supported the same
Sterling had a mixed day but Euro took advantage of the equity rally-Feb 25.
R2: 1.2960 S2:1.2620
Chart pattern hints sideways movement for the day . Trading range for the day is expected between 1.2660-1.2930 levels for the day. Currency is trading above the moving average but chart pattern hints a small consolidation .Momentum and relative strength index are seen flat.
R2: 1.4660 S2: 1. 4420
Chart pattern signals a bullish movement for the day. Trading range is expected between 1.4440-1.4630 levels for the day. Currency is trading below the the moving average and Momentum and stochastic are seen trending up giving bullish signals supported by parabolic.
Indian Rupee perked up on the back of S&P outlook-Feb 25.
Evening Report-Feb 24.
Rupee falls and closed at 49.84 against dollar after having touched an intraday high of 49.79 as banks bought dollars after Standards & Poor's cut India's long-term sovereign credit rating outlook to Negative from Stable.Bonds are trading lower as the ongoing auction of long dated securities has created nervousness about further borrowings by the government. S&P cut India's credit rating owing to the country's huge fiscal deficit and said the gap may widen further if the soon-to-be elected government announces more stimulus packages but the currency's slide was limited as banks sold dollars for exporters and also as local shares were off lows.The non-deliverable forward dollar/rupee rate erased all and booked profits.The concerns over the banking industry sunk U.S. equity markets and the prevailing risk aversion will continue to be a supportive factor for the dollar.The lack of communication from U.S. Treasury Secretary Tim Geithner has help fuel the fear as the government has yet to give more specifics on their plan of action to deal with the toxic assets that are plaguing bank’s balance sheets. President Obama will address Congress and the nation today and his remarks could help restore confidence the remainder of the week. However, the economic calendar today is expected to bring more sobering news as consumer confidence, home prices and manufacturing are expected to decline further. The data will only increase expectations that the current recession will deepen and add to risk aversion which could send the dollar higher on the day. Euro made a steady climb traded to reach as high as 1.2800 despite the German IFO reading unexpectedly declining to 82.6 from 83.0. Economists were forecasting that business sentiment would remain flat as a German stimulus package and renewed banking concerns would offset each other. However the indicator did see improvement in its expectations component for the second month which could be a sign of future growth. The improved outlook may be based on expectations that the ECB will continue to cut rates and the dip in the current assessment reading bolsters the argument for further easing. Meanwhile industrial new orders falling by another 5.2% in December demonstrates the current weakness in the economy and further justification for another rate cut. The dollar/yen pushed above the 95.50 handle for the first time since December 1st as the deteriorating outlook for the Japanese economy continues to weaken the local currency. This week’s economic calendar is expected to show household spending slowed by another 5.8% which will erase any hopes that domestic growth could offset the impact of declining global demand for Japanese exports. The clear change in sentiment for the Yen could inspire the BoJ to intervene to weaken the currency further in hopes that it would help make Japanese goods more desirable. The Pound consolidated above the 1.4500 price level despite a slight increase in mortgages to 23,376 from 22,416 in December. The mild improvement doesn’t offset the fact the year saw a 43% decline for a year earlier. Meanwhile, total business investment for the 4Q fell 3.9% which was better than expectations of -4.2%, which demonstrates that activity hasn’t completely dried up. However, if it continues to hold then may see the pound remain range bound leading to another test of support at 1.4100.
Monday, February 23, 2009
Yen continued its weakness-Feb 24
R2: 95.97 S2:93.50
Yen chart pattern indicates a bullish crossovers for the day . Trading range for the day is expected between 93.90 – 95.80 levels . Momentum are seen trending up and currency is seen trading above the moving average giving indication of a bull run . Parabolic is also supported the same
Euro fell from the resistance level but pound sustained.-Feb 24
R2: 1.2820 S2:1.2420
Chart pattern hints sideways to bull note for the day . Trading range for the day is expected between 1.2620-1.2820 levels for the day. Currency is trading between the fast and slow moving average giving sideways direction .Momentum indicators are pointing up giving room for small upward correction.
R2: 1.4660 S2: 1. 4440
Chart pattern signals a bullish movement for the day. Trading range is expected between 1.4480-1.4630 levels for the day. Currency is trading below the the moving average and Momentum and stochastic are seen trending up giving bullish signals supported by parabolic.
Rupee fell on concerns of more capital outflows -Feb 24.
Evening Report-Feb 23.
Rupee Market remained closed .The dollar declined for a third day , the longest losing streak this year, as stocks rose and Treasuries fell after the Wall Street Journal cited unidentified people as saying the U.S. may raise its holding in Citigroup Inc The U.S. government may end up holding as much as 40 percent of Citigroup’s common stock, while bank executives prefer the stake to be closer to 25 percent. The dollar and the yen fell against the Euro on speculation the U.S. government will increase its stakes in domestic banks to shore up the financial system, damping demand for the currencies as a refuge.The Euro pared gains against the dollar after European Central Bank President Trichet said credit flows in the Euro region are starting to decline. The financial system remains under "severe strain," which is hampering an economic recovery .The yen fell to a five-week low against the Euro before a government report this week that economists say will show Japan posted a trade deficit for a fourth straight month. "Japan’s trade balance is worsening, so the yen is losing some of its safe-haven status," . Currency headed for its worst month against the dollar since April after government reports showed Japan is sinking deeper into recession, with fourth-quarter gross domestic product contracting at an annual rate of 12.7 percent, the most since the 1974 oil shock. The pound rose to the highest level in almost two weeks against the dollar on speculation banks are stepping up efforts to shore up their finances. The pound also rose against the yen and the Euro after a person familiar with the matter said Royal Bank of Scotland Group Plc plans to cut costs by more than 1 billion pounds ($1.44 billion) and the Wall Street Journal reported the U.S. may raise its holding in Citigroup Inc. U.K. government bonds fell as the FTSE Index jumped 1.1 percent.
Friday, February 20, 2009
Evening Report-Feb 20.
Indian Rupee continues to trade weaker although it seems to have recovered partly, and closed at 49.74 against the dollar.The non-deliverable forward dollar/rupee rate was up tracking the greenback's rise against most other global currencies such as the euro and pound sterling . Overall the market is quiet today because of the strike by RBI officials.The U.S. government Inflation data is scheduled to cross the wires today and economists are forecasting that prices rose 0.3% in January, which would be the first increase since July. Despite the expected monthly increase the annualized reading is expected to fall to -0.1%.The tick up in inflation in January could be a sign that prices are stabilizing but the continued deterioration in the labor market and further contraction in the global economy should lead to prices falling further. Nevertheless, higher inflation could remind traders that interest rates near zero and the government pumping dollars into the system are a recipe for future inflation and may raise interest rate expectations which would add to current bullish dollar sentiment. The greenback has benefited from risk aversion flows as equity markets continued their decline during Asia and European trading. The Dow has completely retraced all of its gains since the November lows and now that it has broken below the support level more losses may be ahead which could drive the dollar to surpass its highs. Euro found support after it fell to as low as 1.2563 despite a weaker than expected PMI reading. Indeed, the region saw continued weakness in manufacturing and services which were both forecasted to improve, sending the composite down to a record low of 36.2 from 38.3 in January. The indicator is a strong forecaster of future growth trends and its continued weakness raises doubt of a rebound in growth by the end of 2009. The weak data will also increase expectations that the ECB will cut rates at their March meeting. The central bank leader has maintained his call for patience which may signal that the central bank won’t cut rates by more than 50 bps, despite markets calling for more. He would also refute contentions that Ireland is a weak link in the economic union, which has been a growing concern. Indeed, many fear that the single currency could be in jeopardy as the weaker nations call for more aggressive actions while a stronger Germany and France prefer to take a measured approach and guard against future problems. British Pound jumped to test 1.4320 on a better than expected retail sales print which saw consumption rise 0.7% in January. Consumer spending rose for a second month as Britons increased purchases of textiles as retailers continued to slash prices. Sterling fell to an intraday low of 1.4150 on the back of continued weakness in equity markets and risk aversion flows. Mounting job losses may make it formidable for British consumers to maintain their current pace of spending. Although strong domestic consumption could help growth rebound, considering the depth of the current recession we should see Britons retrench going forward. The BoE is expected to lower its benchmark rate at its next policy meeting and embark on quantitative easing which could limit the pound’s upside potential. Yen rose against the dollar as falling company earnings fueled concern the recession is deepening prompting traders to buy the currency as a refuge.yen is attractive in times of financial turmoil because Japan’s current-account surplus reduces the country’s reliance on overseas lenders. The currency also typically gains before end of financial year as some institutions sell foreign assets in favor of yen-denominated holdings to bolster balance sheets as they prepare to report to investors. .
Thursday, February 19, 2009
Yen continued to be sold-Feb 20.
R2: 94.90 S2:93.50
Yen chart pattern indicates a bullish crossovers for the day . Trading range for the day is expected between 93.80 – 94.70 levels . Momentum are seen trending up and currency is seen trading above the moving average giving indication of a bull run . Parabolic is also supported the same
Euro and Pound gave some bullish consolidation-Feb 20.
The Euro bounced on the back on heavy EUR/JPY buying surging to the 120 level but weak US stocks pulled both pairs lower. Concerns persist after Germany Merkal failed to offer any concrete plans to assist banks. Looking ahead for Eurozone PMI services forecast at 35 vs. 34.4 previously.Sterling surged on the back in GBP/JPY buying and EUR/GBP sales with the pound developing a bullish bias against a host of currencies. The pair did give up gains against the USD late in the US session with stocks coming back under pressure. January Retail Sales are forecast at -0.1% vs. 1.6% previously.·
Technical Outlook:
EURO R1: 1.2790 S1:1.2440
R2: 1.2820 S2:1.2420
Chart pattern hints bear note for the day . Trading range for the day is expected between 1.2510-1.2720 levels for the day. If the currency is able to sustain below the psychological support of 1.2500 then we can see a free fall to 1.2420 and 1.2390 levels. Momentum and stochastic indicators are pointing down.
GBP R1: 1.4340 S1: 1. 4100
R2: 1.4360 S2: 1. 4080
Chart pattern signals a mixed to bearish movement for the day. Trading range is expected between 1.4120-1.4320 levels for the day. Currency is trading below the the moving average and Momentum and stochastic are seen trending down giving bearish crossover supported by parabolic.
Rupee down on outflow concerns-Feb 20.
USDINR chart pattern indicates a small upward correction for the day. With the trading range between 49.60-49.96 levels. With good support seen at 49.55 levels and second support at 49.30 and key resistance at50.05 levels. Stochastic is seen trending up giving indication of a upward correction.hnical Outlook:
evening report feb 19
evening report feb 19
Wednesday, February 18, 2009
Aussie rose on the back of gold -Feb 19.
Australian Dollar Held at noted support around 0.6350 with the pair finding strength in the large increase in gold and heavy AUD/JPY buying that emerged in the US session. Q4 retail sales were worse than expected at 0.8% vs. 1.0%. Australian currency rose as Asian equities gained and President Obama pledged $275 billion to help stem home foreclosures.
Technical Outlook:
R1: 0. 6560 S1:0.6250
R2: 0.6580 S2: 0.6240
Chart pattern signals bearish movement for the day .Trading range is expected between 0.6260 - 0.6540 levels Stochastic is trending down supported by momentum and moving averages are giving bearish crossovers .Aussie charts shows the formation of double top clearly indicating a bear note.
Yen defied risk aversion-Feb 19.
Japanese Yen defied risk aversion for the 3rd day and broke higher above 93 on the USD/JPY. The market has turned bearish on the Yen in recent trading sessions with Government instability and worsening economic outlook weighing. Yen above 93.00 at six-week high fuelled by U.S. Gov. economic plans . Looking ahead for BoJ meets today.
Technical Outlook:
R1: 94.60 S1:92.10
R2: 94.80 S2:91.90
Yen chart pattern indicates a bullish crossovers for the day . Trading range for the day is expected between 92.20 – 94.50 levels . Momentum are seen trending up and currency is seen trading above the moving average giving indication of a bull run . Parabolic is also supported the same
Euro and Pound maintains the bullish tone-Feb 19.
Euro rose from near a three- month low against the dollar on speculation that German Chancellor will signal Europe’s largest economy plans to take action to help avert the financial turmoil in the region. Sterling maintained a slightly bullish tone with the market once again buying the dip towards 1.41. February CBI Orders weakened to -56 vs. -45 forecast. Also released the MPC minutes showed a 8-1 vote for the rate cut with Blanch flower calling for a bigger cut. U.K. revenue figures to be announced today may show a slump as a result of the government's capital bailout of banks and lower receipts from bonuses and the financial services industry.
Technical Outlook:
EURO R1: 1.2790 S1:1.2440
R2: 1.2820 S2:1.2420
Chart pattern hints bear note for the day . Trading range for the day is expected between 1.2500-1.2780 levels for the day. If the currency is able to sustain below the psychological support of 1.2500 then we can see a free fall to 1.2420 and 1.2390 levels. Momentum and stochastic indicators are pointing down.
GBP R1: 1.4390 S1: 1. 4040
R2: 1.4410 S2: 1. 4020
Chart pattern signals a mixed to bearish movement for the day. Trading range is expected between 1.4060-1.4380 levels for the day. Currency is trading on the the moving average and Momentum and stochastic are seen trending down giving bearish crossover supported by parabolic.
Rupee unchanged-Feb 19.
EVENING REPORT:- Feb 18.
Indian Rupee edged closer to the 50 mark and closes at 49.93 levels for the day . The decline which began continued for the second day. Certain state-run banks sold dollars to prevent the rupee from dropping further. The lack of any stimulus in the interm budget has greatly soured the mood for capital inflows and in turn for the local currency.NDF arbitrage too has begun in the earnest with the mood souring for the Indian unit. RBI is expected to conduct open market operations through an auction based mechanism for injecting liquidity ahead of Rs 12,000 crores of bonds on February 24.U.S. fundamental calendar is full of significant indicators that will give markets a look at the housing market and manufacturing activity. Housing starts in January are expected to have fallen to a fresh all-time low of 529,000 in January following 550,000 the month prior. Tight credit markets have dried up demand in the housing market, which has discouraged new construction. Building permits are also expected to fall to a record low of 525,000 signaling that activity will continue to decline. Meanwhile, industrial production is forecasted to drop by another 1.5% following the 2.0% contraction in December as declining global demand combined with the local recession has stalled activity. The dour data may add to the prevailing pessimistic sentiment which could add dollar support. The FOMC will also release their minutes from their last meeting which will give insights into the MPC’s views on the state of the economy and what measures they may implement in the future. The prospect of additional measures from the central bank and the signing of the fiscal stimulus plan by President Obama could spark an increase in risk appetite and dollar weakness. After fighting its way back to1.2640 the Euro dropped back to 1.2560 as the banking troubles of Eastern Europe continue to weigh on the currency. Buying out of Asia led to the initial push higher and bullish comments from ECB member Strak have led to the single currency finding a bid tone again as it has risen back above 1.2580. The committee member in a radio interview forecasted that the impact from the various government measures would stop the current downturn and led to stabilization by the end of the year. However, the lowest level of construction output has dampened bullish sentiment and could lead to ore losses for the Euro. December construction output declined by 2.2% after a 1.7% drop the month prior dragging the annualized rate down to –10.1%. Pound Drops On Britain Credit Rating Concerns, BoE Unanimous on Rate Cut and Quantitative Easing.Pound fell to as low as 1.4090 amid U.K. rating fears following an article in the U.K. Telegraph, which warned that Britain's AAA credit rating was in jeopardy due to the scale of the bank bailout. Sterling had reached as high as 1.4300 before the rating concerns as forex traders were starting to bet the BoE may signal an end to their easing cycle with the release of the minutes from their last policy meeting. The central bank had voted 8-1 for a 50 bps reduction with perennial dove David Blanchflower typically calling for a deeper cut of 100 bps. The outgoing committee member had warned of the current recession over a year ago and his call for further easing could influence the committee to cut by another 50 bps at their next meeting. However, the committee also had concerns that further easing could be harmful to the economy which could lead them to refrain from further easing as they explore additional measures.Japanese currency remained down versus the US dollar.The Bank of Japan began its two-day policy meeting today.
Tuesday, February 17, 2009
Yen gained for the third day-Feb 18.
The yen gained for a third day on speculation European banks will disclose increasing losses due to the financial crisis in the region and on concern stock declines will spur investors to sell higher-yielding assets they bought with funds from Japan.
Technical Outlook:
R1: 92.90 S1:91.60
R2: 93.00 S2:91.50
yen chart pattern indicates the currency to have a upward movement for the day. Trading range for the day is expected between 91.80-92.80 levels. Stochastic is seen flat and the currency is expected to have a resistance at the upper bollingers.
Rupee eases as stock market falls-Feb 18.
The Rupee weakened pressured lower by outflow concerns from the stock market following weak regional indices.Chart pattern indicates Indian unit to be on mixed note for the day. Trading range is expected between 49.30-49.85.currency holds its support at 49.17 levels and has its resistance at 49.95 levels for the day. Stochastic is seen trending down indicating a downtrend but only bearish crossover can confirm the trend for the day.
Euro on sell off but pound sustains-Feb 18.
The Euro traded near a 10-week low against the dollar on concern the region’s banks will disclose increasing losses due to the deepening financial crisis in central and eastern Europe .Currency fell against the dollar on speculation Commerz bank AG, Germany’s second largest, and ING Groep NV, the biggest Dutch financial company, will report combined losses of more than 4 billion Euro ($5 billion) when they release earnings today British pound was actually one of the stronger currencies in the forex markets slipping only against the greenback, as the latest inflation data suggests that the Bank of England may be hesitant to slash rates to zero in the near-term. Though UK CPI fell 0.7 percent in January, the annualized pace remained well above the BOE’s 2 percent target at 3.0 percent, down from 3.1 percent in December. The BOE has indicated that they expect inflation to fall much further this year, but the direction of interest rate expectations for the UK may hinge upon the release of the BOE’s meeting minutes
EURO R1: 1.2750 S1:1.2500
R2: 1.2760 S2:1.2480
chart pattern indicates the currency to have a bearish note for the day. Trading range for the day is expected between 1.2520-1.2730 levels for the day. Stochastic is seen flat and currency is trading below the moving average and is expected to have a small upward correction as profit booking .
GBP R1: 1.4340 S1: 1. 4100
R2: 1.4350 S2: 1. 4070
chart pattern shows a narrow trade in the currency. With the trading range expected between 1.4110-1.4310 levels. Currency is trading on the lower bollingers but narrow band shows a range bound move. Stochastic is also seen flat.
eVENING REPORT FEB 17
Monday, February 16, 2009
Yen strengthened on the back of risk aversion-Feb 17.
Japanese Yen strengthened as risk aversion kept the safe haven well supported. Q4 GDP fell -3.3% slowing to its slowest pace since 1974. Initial reaction sent the USD/JPY lower but focus switched to the likelihood that a stimulus package will be announced and the pair rallied off lows.
Technical Outlook:
R1: 93.10 S1:91.60
R2: 93.20 S2:91.50
Yen chart pattern indicates a bullish correction for the day . Trading range for the day is expected between 91.70 – 93.00 levels . Momentum are seen trending up and currency is seen trading above thew moving average. Parabolic is also supported the same
Euro and Pound opened lower taking cues from U.S.futures-Feb 17.
Euro opened the week under pressure as US futures pointed to downside and Newspapers over the weekend focused on the weakened debt structure of Eastern Europe. Looking ahead, German Zew Survey Current forecast to fall to -81 vs. -77 previously .Sterling opened sharply lower falling to supports from last week before confirmation that the UK government wasn’t thinking of Nationalizing Lloyds and BoE Member Bean hinted at stimulus measures let the pair rally back to 1.43. Looking ahead for January CPI forecast at -1.0% vs. -0.4% previously. Also Released January RPI forecast to fall -1.5% vs. -1.4% previously.
Technical Outlook:
EURO R1: 1.2790 S1:1.2570
R2: 1.2820 S2:1.2550
Chart pattern hints a small downward correction for the day . Trading range for the day is expected between 1.2580-1.2780 levels for the day. Currency is seen trading below the moving average giving bearish crossover. Stochastic and momentum are seen trending down supporting the outlook.
GBP R1: 1.4360 S1: 1. 4040
R2: 1.4380 S2: 1. 4020
Chart pattern signals a bearish movement for the day. Trading range is expected between 1.4060-1.4350 levels for the day. Currency is trading below the moving average and Momentum is seen flat and stochastic are seen trending down giving bearish crossover supported by parabolic.
Rupee weakend on expectation of fund outflows-Feb 17.
USDINR chart pattern indicates a bullish move for the day . Stochastic is seen trending up supporting the bull view . Trading range is expected between 48.85 - 49.15.With good support at 48.80 level and key resistance at 49.20 levels break of which will see 48.39 for the day. Currency is trading above the moving average and has tested the upper Bollinger level but caution required as market is trading in the overbought levels.
Evening Report-Feb 16.
Indian Rupee closed at 48.83 levels extending its slide tracking a more than three percent drop in domestic shares after the interim budget disappointed the market.The President’s day holiday should lead to a low volume day of trading as U.S. equity markets will be closed. However, be conscious that on such a day price action is susceptible to volatility as a few large buyers could impact price action. The dollar may continue to be supported by safe haven flows, following the dismal outlook by the G-7 for the global economy. The economic calendar isn’t expected to provide any major event risk until Friday’s CPI figures which may lead sentiment at the mercy of the broader themes. The Pound would fall to support at 1.4150 after the Rightmove House price index fell to a new annualized record low of -9.1%. Sterling would bounce from the price level rising over 100 bps to over 1.4260. Sterling start the day’s trading with a 100 pip decline after the markets priced in the uneventful G-7 summit. The finance ministers and central bankers from the developed nations agreed that the global economy was in a "severe" downturn and they vowed to do everything they could to stop the problem. However, the lack of a course on how to deal with the problem added to concerns and sparked risk aversion flows. The inability of the BoE and other central banks to revive the credit markets has accelerated the downturn and prevented the housing market to stabilize which was the root of the problem. The post G-7 fallout would sink the Euro to a low of 1.2731 before finding support, but the single currency would only reach as high as 1.2791 before giving back its gains. 1.2700 will be a key level to watch as it has held as support since December 5th,2008, break below could lead to a sharp move lower with a test of 1.2500 likely. Additionally, the 20-Day SMA has remained as staunch resistance and the technical level is on a downward trajectory as it has fallen below 1.300 for the first time since mid December at 1.2948. Yen price action demonstrates the lack of uncertainty in the markets. After a sharp fall to 91.32 the USD/JPY would shoot higher to 92.05. Japan’s economy contracted the most since 1974 which added to the dour post G-7 sentiment. However, the pair’s rise to 92.05 shows that markets are refraining from becoming too pessimistic with several stimulus packages from all the developed nations about to be unleashed.
Sunday, February 15, 2009
Australian Dollars Slip as G-7 Calls Slump -Feb 16.
Yen strengthens as japan's economy shrinks-Feb 16.
Japanese Yen positive momentum in Asia sent the crosses to day highs in early Europe but the lack of follow through in US stocks pare gains going into the weekend. USD/JPY was especially well supported as technically this pair pointed to a break higher and the market is cautious of any intervention talk out of the G7 meeting. Looking ahead for Japan GDP Q4 forecast to fall -3.1% Q/Q.
Technical Outlook:
R1: 92.60 S1:90.80
R2: 92.80 S2:90.50
Yen chart pattern indicates the currency to give a downward correction after testing the resistance levels . Trading range for the day is expected between 90.90 – 92.40 levels . Momentum are seen trending up and currency is seen trading above thew moving average.
euro weakened but Pound was steady-Feb 16.
Euro weakened after GDP data revealed the economy’s slowdown was accelerating. Q4 German GDP fell -2.1% vs. -1.8% forecast and the Euro zone GDP dropped -1.5% vs. -1.3%. Sterling rebounded during the day briefly touching 1.46 before settling back into the US close. Market views are mixed with some participants covering shorts ahead of the G7 on concerns the Pounds weakness may be mentioned.
Technical Outlook:
EURO R1: 1.2850 S1:1.2670
R2: 1.2880 S2:1.2650
Chart pattern hints a small downward correction for the day . Trading range for the day is expected between 1.2680-1.2840 levels for the day. Currency is seen trading below the moving average giving bearish crossover. Stochastic and momentum are seen trending down supporting the outlook.
GBP R1: 1.4360 S1: 1. 4110
R2: 1.4380 S2: 1. 4080
Chart pattern signals a mixed to bearish movement for the day. Trading range is expected between 1.4120-1.4350 levels for the day. Currency is trading below the moving average and Momentum is seen flat and stochastic are seen trending down giving bearish crossover but caution is given by parabolic.
Rupee was a shade weaker as trader taking cues from interim budget.-feb 16.
Friday, February 13, 2009
Evening Report-Feb 13.
Thursday, February 12, 2009
Australian Dollar had a busy day
R1: 0. 6660 S1:0.6490
R2: 0.6690 S2: 0.6480
Chart pattern signals sideways to bullish for the day .Trading range is expected between 0.6504 - 0.6640 levels Stochastic and momentum are seen trending up giving clues for slight upward correction and parabolic is also supporting the bull note.
Japanese Yen crosses had a roller coaster -Feb 13.
R2: 91.80 S2:90.20
Yen chart pattern indicates the currency to remain bullish note . Trading range for the day is expected between 90.50 – 91.40 levels . Momentum and Stochastic are seen flat remaining silent on the issue but parabolic is supporting the bull note.
Sterling and Euro fell on weak economic data-Feb13
Euro weak economic data and risk aversion weighed on the pair with heavy EUR/JPY selling dragging the major through support at 1.2800. December Industrial Production drop -2.6% vs. -2.1% forecast. The late Dow rally saw a sharp bounce back to opening levels. Looking ahead, Q4 German GDP is forecast at -1.8% vs. -0.5% previously. Also released, Q4 Euro zone GDP is forecast to drop -1.3% vs. -0.2% previously. Sterling was one the worst performing currencies with the pair not finding support until the 1.41 figures was seen.
Technical Outlook:
EURO R1: 1.2990 S1:1.2800
R2: 1.3010 S2:1.2790
Chart pattern hints a small bull correction for the day . Trading range for the day is expected between 1.2830-1.2980 levels for the day. Currency is seen trading above the moving average giving bullish outlook. Stochastic and momentum are seen trending up supporting the outlook.
GBP R1: 1.4460 S1: 1. 4110
R2: 1.4480 S2: 1. 4060
Chart pattern signals a bearish crow pattern for the day. Trading range is expected between 1.4130-1.4450 levels for the day. Currency is trading below the moving average giving bearish crossover and Momentum and stochastic are seen trending down giving bearish crossover .
Rupee rose supported by firm Asian stock-Feb 13.
Evening Report-feb 12.
The Rupee slipped and closed at 48.84/85 against the U.S. dollar after moving in a narrow range because banks bought the greenback noting the over 1% fall in local share market . The non-deliverable forward dollar/rupee rate was steady, and moved in a thin band in line with the spot dollar/rupee movement India's industrial output contracted 2.0% compared with a growth 1.7% a month ago. India's headline inflation rate fell to a 55-week low of 4.39%. The fall in inflation rate was mainly on account of a sharp decline in fuel prices.U.S.Dollar remained mixed.The U.S. retail sales report is expected to show that consumer spending declined by 0.8% in January after a 2.7% drop the month prior. It marked the seventh straight monthly decline as consumers have continued to retrench as companies continue to slash jobs. . No that it appears that the "Obama Stimulus" is going to be passed; the outlook for consumer spending may increase with the expected tax cuts. Therefore, a mild decline in consumption in January could spark risk appetite, which could weigh on the dollar.The Euro fell over 100 bps below 1.2800 during overnight trading as the outlook for the European economy dimmed, adding to the heightened fears of an extended global downturn. Markets have become concerned that the impact from the efforts of the various nations to stimulate their economies won’t be enough to pull the global economy out of it s current downturn anytime soon. The European monthly report reinforced these sentiments as it lowered its growth forecasts for the region to –1.7% from 0.3% on the year. Meanwhile, industrial production in the region fell 2.6% in December dragging the annualized number down to –12.0%, which was an all-time high.Then pound also fell victim to investor fears and lower interest rate expectations as it dropped over 250 to below 1.2816 as risk appetite and lower interest rates expectations. The BoE in quarterly inflation report signaled that more a zero interest rate policy may be instituted by the central bank as it sees the downside risk to growth and inflation increasing. The yen rose against major currencies in safe-haven trades with investors avoiding risk as Japanese stock prices fell on disappointment over financial rescue plans in the United States
Wednesday, February 11, 2009
Yen Gains as Stocks Fall on Concern Bank Bailout Plan May Fail -feb 12.
YEN R1: 90.60 S1:89.30
R2: 90.80 S2:89.20
Yen chart pattern indicates the currency to remain bearish note for the day giving a bearish crow pattern . Trading range for the day is expected between 89.40 – 90.40 levels . Momentum are seen trending down and is expected to give a small consolidation and Relative strength index is also supporting the same .
Australian Dollar kept to a tight range-Feb 12.
Australian Dollar kept to a tight range recovering early to test 0.6600 before a second wave of selling saw support at 0.6480-0.6500. The market finding support from a large rally in Gold overnight but risk aversion is capping gains in the short term.
Technical Outlook:
R1: 0. 6660 S1:0.6490
R2: 0.6690 S2: 0.6480
Chart pattern signals sideways to bullish for the day .Trading range is expected between 0.6504 - 0.6640 levels Stochastic and momentum are seen trending up giving clues for slight upward correction and parabolic is also supporting the bull note.
Euro and pound tumbles-Feb 12.
EURO R1: 1.2980 S1:1.2770
R2: 1.3010 S2:1.2750
Chart pattern hints a small bull correction for the day . Trading range for the day is expected between 1.2840-1.2980 levels for the day. Currency is seen trading above the moving average giving bullish outlook. Stochastic and momentum are seen trending up supporting the outlook.
R2: 1.4480 S2: 1. 4210
Chart pattern signals a bearish crow pattern for the day. Trading range is expected between 1.4250-1.4450 levels for the day. Currency is trading below the moving average and Momentum and stochastic are seen trending down giving bearish crossover .
Rupee opens down as Asian shares fall -feb 12.
Rupee opened down as falls in Asian stock markets raised concerns about foreign fund outflows, but the dollar's weakness against major currencies provided some support. U.S. Dollar kept to a tight range with some profit taking leaving the USD relatively unchanged against most of the majors. December Trade Balance improved to -39.9bn vs. -41.6bn previously. Late in the day news emerged of a deal reached to resolve differences between the House and Senate versions of the stimulus bill. . Looking ahead, Weekly Jobless claims are forecast at 610K vs. 626K previously. January Retail Sales are forecast -0.8% vs. -2.7% previously. ·
Technical Outlook:
USDINR chart pattern gives an indication of bullish note for the day. Stochastic is seen trending up supporting the bull view the currency is expected to test resistance level of 48.85 levels. Trading range is expected between 48.58 - 48.80.With good support at 48.54 level for the day.
Evening Report-Feb 11.
Tuesday, February 10, 2009
Australian Dollar suffered severely-Feb 11.
Yen tracked equities and fell-Feb 11.
YEN R1: 91.00 S1:89.80
R2: 91.20 S2:89.50
Yen chart pattern indicates the currency to remain bearish note for the day giving a bearish crow pattern . Trading range for the day is expected between 89.90 – 90.80 levels . Momentum are seen trending down and is expected to give a small consolidation and Relative strength index is also supporting the same .
Euro and Pound came under selling pressure-Feb 11.
R2: 1.3010 S2:1.2750
Chart pattern hints bearish note for the day . Trading range for the day is expected between 1.2790-1.2950 levels for the day. Currency is seen trading below the moving average giving bearish outlook. Stochastic and momentum are seen trending down and parabolic is also supporting the bearish note.
R2: 1.4680 S2: 1. 4350
Chart pattern signals a bearish note for the day. Trading range is expected between 1.4380-1.4650 levels for the day. Currency is trading below the moving average and Momentum and stochastic are seen trending down giving bearish crossover .
Rupee dropped in early trade-Feb 11.
Rupee dropped in early trade tracking the dollar's strength against other major currencies overseas and losses in regional stock markets. U.S. Dollar the mood darkened considerably yesterday as the much anticipated speech from Geithner failed to deliver and what started as profit taking turned into a rout. Banking stocks were under pressure as Geithner lacked clarity in the direction the new administration will take. Looking ahead for December Trade Balance forecast to improve to -36Bn.
Technical outlook:
USDINR chart pattern gives an indication of bullish note for the day. Since the currency has opened with a gap though Stochastic is seen trending up supporting the bull view the currency is expected to test 48.72 levels as gap filling process and take support at 49.65. Trading range is expected between 48.75 - 49.02.With good resistance at 49.12 level for the day.
Evening Report-Feb 10.
Rupee closes at 48.73 levels tracking a broad dollar rally overseas while a shaky stock market also weighed on sentiment. Indian Unit remained weak as banks bought dollars to meet demand from importers and noting the greenback's rise against major currencies. Currency moved in a narrow band as banks hardly took big positions in the market as dollar supply from banks matched demand from importers .Non-deliverable forward dollar/rupee rates were up noting the greenback's rise against other global currencies .U.S. session will be focusing on the upcoming testimony from U.S. Treasury Secretary and Fed Chairman in addition to the Senate voting on the fiscal stimulus plan. The Treasury Secretary is expected to outline the details of the spending of the remaining $350 billion TARP funds, which is expected to include the involvement of private firms to help buy the toxic assets. Meanwhile the Fed Chairman will give more details of the central banks efforts to loosen credit markets through off balance sheet maneuvers. The combined testimony may help ease current fears, which could restore recent risk appetite and weigh on the dollar. The Senate vote could be the main driver of price action if the government aide package is passed, which could lead to a demand for higher yielding assets and dollar weakness. Euro started to find support after its free fall on the back of speculation that European banks will take losses from Russian loans. There have been reports that Russian is expected to request postponement of some $400 billion in private sector debt. Meanwhile the fundamental data from the region continued to signal that the region would sink deeper into a recession as French and Italian industrial production contracted further. French activity fell to –1.8%. In Italy industrial production had fell 2.5% dragging the annualized decline to 14.3%.The troubles in Russia demonstrates that despite the fact that the Eastern European emerging markets aren’t part of the Euro-zone, there economies are ultimately tied to the region and their troubles can filter through to the developed nations. Therefore we may see the ECB need to lower interest rates further and take additional methods in order to avoid a deeper recession. Pound has given back some of its gains after it found resistance at 1.5000. The U.K. visible trade deficit narrowed more than expected to £7.37 bln . A 0.3% rise in exports may signal that the U.K. economy is finally starting to benefit from the Pound’s depreciation, which was forecasted by the BoE. This will strengthen the case for the central bank to keep interest rates on hold as the assess the impact of their past actions. USD/JPY remained rather steady consolidating at the highest levels despite poor corporate news in Japan and news about troubled Russian Banks.
Monday, February 9, 2009
yen ended a three-day loss -Feb 10
R2: 92.20 S2:90.40
yen chart pattern indicates the currency to remain sideways to bearish for the day. Trading range for the day is expected between 90.70 – 91.80 levels . Momentum are seen trending down and is expected to give a small consolidation and Relative strength index is also supporting the same but parabolic is giving a caution .
Euro and pound giving bullish consolidation-Feb 10.
EURO R1: 1.3020 S1:1.2730
R2: 1.3030 S2:1.2720
chart pattern hints bearish note for the day . Trading range for the day is expected between 1.2750-1.2980 levels for the day. Currency is seen trading between the fast and slow moving average giving mixed outlook. Stochastic and momentum are seen trending down and parabolic is also supporting the bearish note.
GBP R1: 1.4960 S1: 1. 4660
R2: 1.4980 S2: 1. 4650
chart pattern signals a bearish note for the day. Trading range is expected between 1.4690-1.4950 levels for the day. Currency is trading above the moving average and Momentum and stochastic are seen trending down giving bearish crossover but the trend can be confirmed only with the break of 1.4710.
Rupee opened steady but weakened -Feb 10.
USDINR chart pattern gives an indication of bullish note for the day. The currency has broken the lower band level and is giving a small upward correction Stochastic is also seen trending up supporting the view. Trading range is expected between 48.54 - 48.88.With good resistance at 48.92 level for the day. Key support for the currency is seen at 48.40 levels.
EVENING REPORT FEB 09
yen trading mixed-feb 09.
Technical Outlook:
R2: 92.50 S2:90.40
yen chart pattern indicates the currency to remain bearish for the day. Trading range for the day is expected between 90.70 – 92.30 levels . Stochastic and momentum are seen trending down and is expected to give a small consolidation .
Euro shrugged off but Sterling continued the bull rally
R2: 1.3080 S2:1.2800
chart pattern hints sideways note for the day . Trading range for the day is expected between 1.2850-1.3030 levels for the day. Currency is seen trading between the fast and slow moving average giving mixed outlook. Stochastic and momentum are seen flat but parabolic is supporting the bearish note.
R2: 1.4860 S2: 1. 4550
chart pattern signals a bearish note for the day. Trading range is expected between 1.4580-1.4830 levels for the day. Currency is trading above the moving average and Momentum and stochastic are seen trending down giving bearish crossover but the trend can be confirmed only with the break of 1.4710.
Rupee rose to three-week highs-feb 09.
Friday, February 6, 2009
Evening Report-Feb 06.
Indian Rupee firmed up in the early trade due to recovery in stock markets amid weak dollar overseas. The currency was trading in a narrow range with downward bias and closed at 48.68 levels as the attention was focused on the fate of the US stimulus package. U.S. dollar has been under some pressure as risk appetite crept back into equity markets, but that may change with the Non Farm payroll report expected to show the economy lost another 540,000 jobs in January. Earlier indicators signal that we could see a greater than expected loss, as jobless claims jumped above 600,000last week and the ADP private jobs report printed at –522,000. Although a deteriorating labor picture is typically a recipe for a flight to safety, there comes a point where markets look beyond the lagging indicator and focus on the prospect of a rebound in growth. Additionally, speculation that the mark to market riles may be relaxed has eased some of the fear regarding banks, as it would lessen the impact of toxic assets on their balance sheets. Euro sold off after the ECB held their benchmark rate at 2.00% but signaled that a 50 bps cut was likely at their March meeting. President Trichet made it clear that the ECB has no intention of employing an zero interest rate policy and that if the central bank would cut rates at their next meeting it may be their last. Nevertheless the central bank head acknowledged the severity of the current downturn, which was reinforced by the dismal German industrial production numbers for December. Activity dropped 4.6% following a revised 3.7% decline the month prior, which dragged the y/y down to –12.0%. Pound tested around 1.4768 levels but has since pare some of its gains as a weak industrial production report and looming . Activity in the U.K. fell 1.7% in December after a 2.5% the month prior, and below estimates of –1.2%. The lack of demand and falling oil prices have raised deflation concerns which were reinforced by prices at the factory gate easing to 3.5% from 4.6%. The pound has found support following the BoE cutting its benchmark rate by 50 bps, as speculation has increased that it may be the end of the central bank’s easing cycle. However, the committee also painted a dismal picture of the current state of the U.K. and global economy, as credit markets remain tight and weakness spreads to emerging markets. The dollar fell against the yen after surging higher the previous day, with the market cautious before key jobs data that was expected to paint another grim picture of the U.S. labour market.
Thursday, February 5, 2009
Japanese Yen was sold
Japanese Yen was sold aggressively at the start of the US open as Stocks rebounded and news that the US stimulus package was nearing completion. Looking ahead for December Leading Indicators released previously at -3.7.
Technical outlook:
YEN R1: 91.90 S1:90.40
R2: 92.00 S2:90.30
yen chart pattern indicates the currency to remain bearish for the day. Trading range for the day is expected between 90.50 – 91.80 levels . Stochastic and momentum are seen flat giving and is expected to give a small consolidation .Currency is trading above the moving average and parabolic is also supporting bull note.
Euro came under pressure after weak data but sterling rallied on rate cut.-feb 06.
Euro came under pressure from plummeting German Industrial Orders and dovish comments from ECB President Trichet after he held rates at 2.0%. Trichet Indicated further rate cuts were on the table and noted that Eurozone exports were weakening. December Industrial fell -6.9% vs. -2.5% forecast. Looking ahead for December German Industrial Output is forecast at -2.5% vs. -3.1% previously. Sterling rallied after the Bank of England cut rates to 1.0% and Halifax House Price Index rose for the first time in 12 months 1.9% m/m. Looking ahead for Industrial Output forecast to drop -1.2% vs. -2.3% previously and January PPI Input Costs are forecast to rise 0.5% vs. -2% previously as the weakening Pound increases import costs.
Technical Outlook:
EURO R1: 1.2950 S1:1.2720
R2: 1.2980 S2:1.2710
chart pattern hints sideways to bull note . Trading range for the day is expected between 1.2740-1.2920 levels for the day. Momentum is seen trending up giving a small upward correction. Stochastic and momentum are seen trending up giving indication of small upward correction.
GBP R1: 1.4750 S1: 1. 4520
R2: 1.4760 S2: 1. 4480
chart pattern shows a bull trend for the day. Trading range is expected between 1.4530-1.4730 levels for the day. Currency is trading above the moving average and Momentum and stochastic are seen trending up giving bullish outlook but caution required as market is trading at overbought levels.
Rupee edged higher supported by the dollar's weakness-Feb 06.
Rupee edged higher supported by the dollar's weakness against some Asian currencies and hopes for a firm opening in stocks. U.S. Dollar despite weak economic data released overnight, stocks in the US rallied off year lows to end up over 1%. High Yielders rallied and the USD/JPY surged past resistance at 90 Yen. Weekly Jobless Claims jumped to 626K vs. 585K previously and December Factory Orders dropped -3.9% vs. -3%. Q4 Labor Costs rose 1.8% vs. 3% forecast and Productivity jumped to 3.2% vs. 1.4% expected. Looking ahead for December Non Farm Payrolls are forecast at -525K vs. -524K bringing the Unemployment Rate to 7.5%
Technical Outlook:
USDINR chart pattern gives an indication of a small upward correction for the day. The currency has broken the lower band level and expected to give a upward correction But the Indian unit would return to bear territory with the breach of 48.65 Trading range is expected between 48.63 - 48.88.With good resistance at 48.95 level for the day.
Evening Report-Feb 05.
Rupee ends at 48.76 levels against the US dollaron mild selling of dollars from banks. Rupee moved in a narrow band as the spot rate was steady as Dollar demand matched the supply .U.S dollar remained sidelined ahead of the key U.S. non-farm payrolls data on Friday, which are expected to show ongoing deterioration in the labour market of the world's largest economy. Market participants will be eyeing weekly jobless claims figures which is projected to show the economy lost an additional 540,000 jobs.Euro was seen steady ahead of ECB rate verdict .German factory orders dropped for the fourth month in December as the index fell 6.9% followed by a revised reading of 5.3% decline in previous month, the data crossed the wires much weaker than the 2.5% drop forecast held by market participants. The breakdown of the report showed that domestic orders fell 4.3% from November, while foreign orders plunged 9.4%.European Central Bank is likey to ease policy further over the near-term as ECB president Trichet reiterates that the Central Bank has not excluded the possibility that the interest rate could go below 2% in March.British Pound rallied after HBoS January house prices. Cable pushed back up to 1.4480 after basing around 1.4370. House prices are still expected to deteriorate, but there may be signs of bargain hunting at current levels. sterling should maintain a supportive tone, but speculative activity should be tempered ahead of today's BoE rate decision, which is expected to result in a rate cut of 50bp to 1%.Japanese Yen Weighed on Japan's Tax Plans.
Wednesday, February 4, 2009
Japanese Yen strengthened-Feb 05.
Japanese Yen strengthened against the EURO and AUD during the early European session on reports of large Japanese selling in both. Better than expected US data prompted rallies in the USD/JPY back to familiar territories. yen chart pattern indicates the currency to remain bullish for the day. Trading range for the day is expected between 88.80 – 89.80 levels . Stochastic and momentum are seen trending up giving a upward correction but only break of the fast moving average level of 89.60 would confirm the trend.With R1: 90.00 and R2: 90.20, S1:88.70 and S2:88.50
Euro fell sharply but Sterling experienced a bullish rally-Feb 05.
Euro fell sharply in the European session with heavy EUR/JPY selling and a Fitch downgrade of Russia the catalyst. Eastern European contagion is becoming a fear going forward and could be a catalyst for further falls. December European Retail Sales remained flat vs. a forecasted fall of -0.3%. Looking ahead for December German Industrial Production is seen -2.5% vs. -6%. Also tonight the ECB meets to discussed but have signaled that no rate cuts is on the cards. Sterling experience another rally at the start of the US session with the market pushing past 1.4500 ahead of the BOE announcement today. Heavy cross buying especially against the EURO underpinned the move higher. Looking ahead for BOE meets tonight and is widely expected to cut by 0.5% to bring the Interest rate to 1.0%.
Technical outlook:
EURO R1: 1.2950 S1:1.2720
R2: 1.2980 S2:1.2700
chart pattern hints towards a bear note . Trading range for the day is expected between 1.2750-1.2940 levels for the day. Momentum is seen trending down and stochastic is also giving a bearish crossover.
GBP R1: 1.4580 S1: 1. 4300
R2: 1.4600 S2: 1. 4290
chart pattern shows a mixed outlook for the day. Trading range is expected between 14310-1.4550 levels for the day. Currency is trading on the moving average and Momentum and stochastic are seen flat but at overbought levels
Rupee moved in a steady band-Feb 05.
Evening Report-Feb 04.
Rupee trimmed some gains against the U.S. dollar and closed at 48.81 levels because banks bought dollars for importers at higher rupee levels. Indian unit had risen around 25 paise in early trade . Dollar's rise against major currencies like Euro and pound sterling prompted banks to buy the greenback. U.S dollar could remain under pressure as risk appetite continues to increase. Although, traders remain cautious equity markets the expectations that a stimulus package will ultimately pass through the Senate has fueled bullish sentiment. Today’s economic calendar may threaten that optimism as the ISM non-manufacturing gauge is expected to show further contraction to 39.0 from 40.1in the sector that accounts for 70% of GDP. Additionally, the ADP employment report is expected to show that the economy lost over 500,000 in January. The report which has been reconfigured too more closely reflect the NFP report due Friday and may provide major event risk for the dollar. Euro stumbled after reaching as high as 1.3070 dropping a 100 bps down to 1.2920. The Euro-zone PMI service final reading for January slipped to 45.2 from the preliminary print of 45.5. Germany and France both saw their individual gauges revised lower which dragged on the overall index, which contracted for an eighth straight month. Meanwhile, retail sales in the region were flat for December which beat expectations of a –0.2% decline. However the year-over-year reading fell 1.6% which was greater than the –1.4% forecasted. The lack of domestic growth will remain a weighing factor on the economy and the service sector and may prolong the current recession. However upside potential may be limited with a pending ECB rate decision tomorrow. Although expectations are that the central bank will keep rates on hold falling inflation and a deepening recession could force President Trichet to continue the current easing policy. U.K. fundamental data continues to improve as the service PMI added to an improving outlook with a print of 42.5 after 40.2 the month prior. The small signs that the U.K. economy may be bottoming could give the BoE reason to pause its easing policy. Expectations are that the central bank will cut rates by 50 bps tomorrow. However, if Governor King signals that they may have reached an end to their easing cycle then we could see the pound continue to gain. The pound/dollar has bounce from its overnight low of 1.4330 and is now looking to test the high of 1.4460. Japanese yen rose against the dollar as traders sought refuge in the currency amid concern the U.S. fiscal stimulus plan will meet Senate resistance and widening credit losses will erode earnings.