Dollar Index
Dollar index snapped a three-day fall and strengthen towards 94.89 levels after robust US economic and healthiest labor markets data since the early 1970s, that also marked the 59th straight week that initial jobless claims remained below 300,000, the longest such streak in more than four decades since the early 1970 which increased hopes of interest rate hike by the US Federal Reserve in the coming months.
This week, monetary policy meeting of US fed and the Bank of Japan coupled with crucial data releases may contribute volatile move in the dollar index. In last meeting policymakers were not in the favor of earlier than expected increase in the US interest rate which was seen as dovish for the US Dollar.
Therefore, dollar trend will depend on the policy outcome and any further hint for delay in rate hike amid China growth optimism may keep weakness in the dollar index in the near future.
Near term resistance is seen at 95.35 sustain trade above will expect to test 95.50-96.00 again, while on the downside crucial support is seen at 93.60 coincide with previous swing low and a break below only could test 93.20-93.00..
Dollar/Rupee - MAY FUTURE
Sell around 66.80-66.90 Target 66.55- 66.30. Stop loss above 67.10 (LTP 66.93)
Or
Buy above 67.15 Target 67.45-67.60. Stop loss below 66.90
Important factor/data from India
Fiscal deficit (pct of Budget estimate) 29 Apr
Dollar/rupee has stalled its fall and recovered towards 66.6375 from the weekly of 66.2075 after upbeat US economic and Healthiest labor markets data which declined to the lowest level since the early 1970s thus raise hopes of a rate hike by the US Federal Reserve even as the European Central Bank kept its policy unchanged.
Technically, since 3 April 2016, USDINR managed to trade below its strong resistance 67.15 which is coincide with 127% Fibonacci Retracement of its previous swing, this may consider an impressive and strong case for further fall in future.
However, snaky headline from the U.S. FOMC April month Policy may materialize demand for the safe-haven currency.
Thereby, any rise towards 66.80-66.90 is expected to give an opportunity to establish a short position unless pair gives a closing above the 67.15 levels.
On the other hand, sustain trade above 67.15 only could expect to test 67.55-67.80.
EUR/RUPEE - MAY FUTURE
Recommendation
Sell around 75.80-75.90 Target 75.25-74.80. Stop loss above 76.10. (LTP : 75.49)
Important factor/data from Europe
German Ifo Business Climate
Euro/Rupee extended its recent bearish trend after euro-zone private sector expansion eased unexpectedly in April even as the ECB left its interest rates unchanged and QE at €80bn. Main refi rate 0.0%.
Deposit rate -0.40%.Marginal lending rate -0.25%. Total monthly QE €80bn, while hinted that rates could be cut again in the short-term future.
Sell strategy given below 75.35 was initiated and EURINR drop towards second target first target 74.80, and settled at 75.1125.
Technically, the two similar top candle stick is and a breakdown of pennant on weekly chart is yet indicating for bearishness in Future.
Further, EURINR would need to trade above 75.80 in order to test 77.00-77.50 on the upside.
GBP/Rupee - MAY FUTURE
Recommendation
Buy above 96.60 Target 97.00-97.50. Stop loss below 96.25 (LTP : 96.21).
Important factor/data from U.K.
Prelim GDP q/q
GBPINR received some support and recovered towards 95.83 levels on Friday after polls suggested solid support for Britain to remain in the European Union in Jun 23 referendum. A poll released Thursday by the Number Cruncher Politics Referendum Forecast showed that the probability of Britain to leave European Union dropped by 20%.
Technically, Double bottom formation on weekly chart is indicating for bearish trend reversal in GBPINR and a break above 96.60 may give valid opportunity to make long positional for the target 97.00-97.50.
On the downside, crucial support is seen at 94.20 a break below only could test 93.80-93.50.
Japanese Yen - MAY FUTURE
Recommendation
Sell below 60.40 Target 59.85-59.50. Stop loss above 60.80 (LTP : 60.43)
Important factor/data from Japan.
Monetary Policy Statement
BOJ Outlook Report
Japanese Yen witnessed a speculator plunged of 2% after a media report said that the Bank of Japan could expand its negative interest rate policy beyond its current applications.
The BOJ's next two-day policy review ends on April 28. Further, the BOJ is struggling to achieve its 2 percent inflation target, which is a key part of premier Shinzo Abe's efforts to conclusively end a long phase of debilitating deflation which also contributed selling activities.
Technically, a double top formation on the weekly chart is indicating for bullish trend reversal in JPYINR and correction is expected to come below 60.40.
On the other hand, strong resistance is seen at 61.20 sustain trade above only could expect to test 61.80-62.00 and above.
High Impact Economic Data & Events Schedule during the week
Date
|
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Impact
|
25.04.16
|
1:30pm
|
EUR
|
German Ifo Business Climate
|
107.1
|
106.7
|
Positive
|
26.04.16
|
6:00pm
|
USD
|
Core Durable Goods Orders m/m
|
0.60%
|
-1.30%
|
Positive
|
7:30pm
|
USD
|
CB Consumer Confidence
|
95.8
|
96.2
|
Negative
| |
27.04.16
|
2:00pm
|
GBP
|
Prelim GDP q/q
|
0.40%
|
0.60%
|
Negative
|
11:30pm
|
USD
|
FOMC Statement
|
-
|
-
|
-
| |
USD
|
Federal Funds Rate
|
<0.50%
|
<0.50%
|
Negative
| ||
28.04.16
|
Tentative
|
JPY
|
Monetary Policy Statement
|
-
|
-
|
-
|
10:30am
|
JPY
|
BOJ Outlook Report
|
-
|
-
|
-
| |
Tentative
|
JPY
|
BOJ Press Conference
|
-
|
-
|
-
| |
6:00pm
|
USD
|
Advance GDP q/q
|
0.70%
|
1.40%
|
Negative
| |
USD
|
Unemployment Claims
|
252K
|
247K
|
Negative
|
