Forex

Euro has hit a fresh high of 1.5573 in early Asian trade, breaking past some very major trendline resistances. With no immediate resistances in sight now, further gains might be seen. The Yen, at 100.60 has hit highs last seen in 1995. A break below 100 is now becoming more and more imminent. If so, we could see 97 also on USD-JPY. Dollar-Swiss has also hit a fresh all-time low of 1.0130. The market could now gun for parity. It seems the world is, indeed abandoning the Dollar-Standard.

Little attention seems to have been paid to Trichet's protestations about excessive currency movements. There seems to be little belief in the market about any serious concerted Central Bank interventions in the currency market.

Crude has been volatile, dipping first to about 107.05 but then rising sharply to a high near 110.20. It is currently trading near 109.75. Gold has also moved higher and is trading near 985.70, just below 990.

The strength of the Yen is telling on Asian stocks and Nikkei in particular which is close to its 104 week low. Asian stocks are down between 0.50%-2.15%.

The Rupee and the Sensex should open weak.

Happy Trading!