By K Venkatraman
The sudden change of guard on the last 2 trading sessions has made odds have tilted in favor of USD. Whether this is real or made to look sort of situation has to be seen from further moves. Every time the talk on carry trade attracts attention it is a sign of majors coming under pressure against USD. We have seen in the past that the trend reverses sooner.
EUR/USD
The euro had been getting support from a bevy of central banks which were diversifying away from USD. But last weeks price action had put food for thoughts to many Cassandra. The USD bulls are back in action after the yield of the 10 year not touched a high of 5.10 %. I get a feeling that the upside appears to be capped at 1.3475 for the time being. On the other side it remains to be seen whether the strong support at 1.3330 holds and any breach of that will make the pair vulnerable for test of 1.3230. In case the euro manages to scrape though above 1.3475, then the pair is expected to re-attempt 1.3535.
Supports: 1.3330***/1.3310/1.3285/1.3230
Resistances: 1.3440*/1.3470***/1.3535**/1.3585
Expected range 1.3285-1.3475.
GBP/USD :
For the sterling the which crashed despite the BoE kept rates on hold the upside now appears to be capped at 1.9785/1.9820. The formation of an irregular H&S with neck line at 1.9820 targets 1.9475. This coincides with the breakout line extended from Q3-Q4 2006 tops. Overall I feel sentiments will remain negative and expect high volatility in the pair. EUR/GBP action requires to be watched.
Supports:1.9690**/1.9640***/1.9540**
Resistances: 1.9745**/1.9785*/1.9895
Expected to move in a range of 1.9540-1.9850.
USD/JPY :
It was calm in the Orient where reversal of carry trades and firing of missiles by N Korea had very limited impact. The pair is well supported at 120.90 and it has been facing major resistance at 122.10. Still looking bullish. Break above that will make the pair attempt 122.65 and beyond. Support at 120.50 -120.70 region is strong.
Supports:120.90*/120.50***/119.80
Resistances:122.10*/122.65**/123.20
Expected range 120.40-122.95.
USD/ CHF : 1
The pair may find good support at 1.2270. Has made a smart thrust above 1.2330-1.2355. this has also breached a major trend line. It remains to be seen as to whether this a real breakout. One more sessions close above 1.2330 will indicate that the pair is likely to attempt 1.2450; Break below 1.2215 will lead to attempt of 1.2180.
Supports:1.2270*/1.2230**/1.2180***
Resistances : 1.2370*/1.2455***/1.2520**
Expected range 1.2220-1.2450.
USD/INR :
Break above 40.90 on the last trading session has made a bout of stoploss triggers at various levels and seen 0.50 movement on single day. This move has been decisive and to changes the pattern of further moves. The pair to be treated bearish only if breaches 40.85 break above 41.20 will trigger further buying pressure up to41.44 and then 41.79. For now it appears that market is reconciling to the broader range of 40.50-41.50 Expected range 40.85-41.44.
Supports: 41.05/40.95**/40.85*/40.72*/40.52*
Resistances: 41.15*/41.22*/41.44*/41.79
XAU :
Upside appears to be capped at 662. After nearly 3 months gap the market has seen the 652 levels breaching. With USD gaining across the board the new range could be 641-663.The break of 652 makes this possible for the metal to test 641 levels and then 636 before bounce back. The earlier observation that Beginning of the month also could be a reason for a sharp up move similar to the big fall during Jan 2007 has precisely been proved correct.
Supports: 641***//636***//631/627***
Resistances: 652***/662**
XAG:
The pullback form 13.80 to 12.90 has just erased the previous up move. Break below 12.90 will open the way for test of 12.43 and then 12.34.
Supports : 13.10/12.90/12.43/12.34
Resistances: 13.48***/13.88***/13.98
EUR/USD
The euro had been getting support from a bevy of central banks which were diversifying away from USD. But last weeks price action had put food for thoughts to many Cassandra. The USD bulls are back in action after the yield of the 10 year not touched a high of 5.10 %. I get a feeling that the upside appears to be capped at 1.3475 for the time being. On the other side it remains to be seen whether the strong support at 1.3330 holds and any breach of that will make the pair vulnerable for test of 1.3230. In case the euro manages to scrape though above 1.3475, then the pair is expected to re-attempt 1.3535.
Supports: 1.3330***/1.3310/1.3285/1.3230
Resistances: 1.3440*/1.3470***/1.3535**/1.3585
Expected range 1.3285-1.3475.
GBP/USD :
For the sterling the which crashed despite the BoE kept rates on hold the upside now appears to be capped at 1.9785/1.9820. The formation of an irregular H&S with neck line at 1.9820 targets 1.9475. This coincides with the breakout line extended from Q3-Q4 2006 tops. Overall I feel sentiments will remain negative and expect high volatility in the pair. EUR/GBP action requires to be watched.
Supports:1.9690**/1.9640***/1.9540**
Resistances: 1.9745**/1.9785*/1.9895
Expected to move in a range of 1.9540-1.9850.
USD/JPY :
It was calm in the Orient where reversal of carry trades and firing of missiles by N Korea had very limited impact. The pair is well supported at 120.90 and it has been facing major resistance at 122.10. Still looking bullish. Break above that will make the pair attempt 122.65 and beyond. Support at 120.50 -120.70 region is strong.
Supports:120.90*/120.50***/119.80
Resistances:122.10*/122.65**/123.20
Expected range 120.40-122.95.
USD/ CHF : 1
The pair may find good support at 1.2270. Has made a smart thrust above 1.2330-1.2355. this has also breached a major trend line. It remains to be seen as to whether this a real breakout. One more sessions close above 1.2330 will indicate that the pair is likely to attempt 1.2450; Break below 1.2215 will lead to attempt of 1.2180.
Supports:1.2270*/1.2230**/1.2180***
Resistances : 1.2370*/1.2455***/1.2520**
Expected range 1.2220-1.2450.
USD/INR :
Break above 40.90 on the last trading session has made a bout of stoploss triggers at various levels and seen 0.50 movement on single day. This move has been decisive and to changes the pattern of further moves. The pair to be treated bearish only if breaches 40.85 break above 41.20 will trigger further buying pressure up to41.44 and then 41.79. For now it appears that market is reconciling to the broader range of 40.50-41.50 Expected range 40.85-41.44.
Supports: 41.05/40.95**/40.85*/40.72*/40.52*
Resistances: 41.15*/41.22*/41.44*/41.79
XAU :
Upside appears to be capped at 662. After nearly 3 months gap the market has seen the 652 levels breaching. With USD gaining across the board the new range could be 641-663.The break of 652 makes this possible for the metal to test 641 levels and then 636 before bounce back. The earlier observation that Beginning of the month also could be a reason for a sharp up move similar to the big fall during Jan 2007 has precisely been proved correct.
Supports: 641***//636***//631/627***
Resistances: 652***/662**
XAG:
The pullback form 13.80 to 12.90 has just erased the previous up move. Break below 12.90 will open the way for test of 12.43 and then 12.34.
Supports : 13.10/12.90/12.43/12.34
Resistances: 13.48***/13.88***/13.98
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