EUR downtrend in tact
New lows of 1.2660 for EURUSD came mid-morning NY time, amid indications of sizeable EURCHF selling out of Switzerland and reports from EU sources that Greek bond swap deal talks were falling short of targets (this in contrast to Tuesday's reports of possible actions to compel all Greek bond holders to participate via the insertion of Collective Action Clauses into existing Greek law bonds).  Earlier euro weakness looks to reflect a combination of negative comments by the EU on Hungary, indications from the 'flash ‘estimate of German 2011 GDP that the biggest Eurozone economy had contracted in Q4, and whispers (unfounded as on NY close) of imminent ratings actions
against Eurozone sovereign(s).

 Is NZD the new G10 safe haven?
On a day that saw equities down small, the VIX open higher and hold its gains and the dollar as measured by the DXY nearly 0.5% higher on the day, NZD still managed an up-day.  It is now 4% higher against the euro in the last week and the strongest G10 performer so far this year by some margin. This has seen our short AUDNZD trade recommendation, initiated in late November last year, start to perform.  Quite why the kiwi is performing well in both risk-on and risk-off environment is something of an enigma, though the absence of any speculation that the RBNZ will reverse its current (mild) tightening bias, steady/firmer dairy prices in recent months and awareness that NZD has figured in some reserve mangers' FX diversification efforts in months past, may each have played some part in this year's sparkling performance.   Any argument in favour of NZD as a safe-haven has to be
somewhat tongue in cheek, but for the time being we expect that any speculative investors minded to buy AUD will remain even more favourably disposed towards NZD.

 ECB centre stage Thursday
Expectations for a further cut in the ECB's key refinancing rate from the current 1% are running low in front of Thursday's inaugural 2012 Council meeting.  BNP economists continue to expect that the refi. Rate will ultimately be cut below 1%, but this looks unlikely before at least February, with risk of later still (the next ECB forecasting round comes in March).  Even with a no-change on rates, there will nevertheless be plenty of interest in the ensuing Draghi press conference.  While the ECB President may be quizzed on whether actions to date, in particular the 3-year LTROS, can be construed as the equivalent of QE, and the President may well deny this is so, the fact remains that the market impact to date is not greatly dissimilar to the early phases of Fed QE; ECB actions have removed one major source of stress/market angst (i.e. fears of a baking sector calamity in
Europe) and risk has benefited as a result, albeit this time in euro.

USD-INR JAN 2012 MCX-SX FUTURE:- Yesterday it opened at 52.10 & made the high at 52.15. It had then fallen to 51.755 to mark as low of the day & finally closed at 52.0325.For the day we see initial support at 51.70-51.75, resistance at 52.30-52.35 & this is likely to be trading range of the day. Breach of the support at 51.70 may lead to retest of 51.25-51.30.Similarly cross above of 52.35 may lead to retest of 52.55-52.60. Swing trader should go short around  52.10  with the stop of 52.20. for the target of 51.75 & 51.30 . Kindly reduce the quantum of lot as stoploss used are wide due to volatility. Remember traders discretion & judgment of price behavior during the entry of trade  is vital for profitability of trade  & this can be done at that moment of time only.

EURO-USD:- Yesterday it opened at 1.2776 & made the high at 1.2790. It had then fallen to 1.2662 to mark as the low of the day & finally closed at 1.2705. For the day we see initial support at 1.2650-1.2675 & resistance at 1.2830-1.2855.The breach 1.2650 will lead to retest of the 1.2525-1.2550.  Swing trader should go short on breach of 1.2650  with the stop of 1.2680 for the target range 1.2525-1.2550 . Traders discretion & judgment of price rally top/price decline bottom while entering trade,  is vital for profitability of trade  & this can be done at that moment of time only. 

EURO-INR JAN 2012 MCX-SX FUTURE :-  Yesterday it opened at 66.1650 & made the high of the day at 66.4300 It  had then fallen to 65.5475 to mark as low of the day & finally closed at 66.2700. For the day we see initial support at 65.50-65.60 & resistance at 66.75-66.85.Breach of 65.50 will lead to retest of 64.20-64.30.   In our view aggressive  swing trader should go short around  66.70  with the stop of 66.80  for the target of 65.60 & 64.30. Once the trade runs in profit trail the stop suitably for exit so that profit is compounded & any higher target can also be taken advantage of it.

GBPINR JAN 2012 MCX FUTURE :- For the day we see  support at 79.00-79.10 & resistance at 80.60-80.70 .  In our view traders should go short around 79.90 with the stop of 80.20 for the target of 79.10 .                   

JPYINR JAN 2012 MCX FUTURE :-   For the day we see  support at 66.60-66.70 & resistance at 67.90-68.00.   In our view traders should go short around 67.80  with the stop of 67.90  for the target  of  66.70

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