Dollar/Rupee May Future
Recommendation
Buy around 67.20-67.30 Target 67.65-67.95. Stop
loss below 66.95
(LTP : 67.56)
Important factor/data from India
CPI inflation
Agricultural laborers Previous (4.98%)
Rural laborers Previous
(5.08%)
Dollar/Rupee posted its longest winning streak
since 10 January 2016 and settled at 67.56 with weekly gain of 0.92%.
USDINR witnessed an abrupt bullish
rally from 660.8050 towards 67.5975 followed by strength in dollar index which
tested seven week high after Fed's April meeting minutes hinted at an interest
rate hike in June against stimulus in Japan and other major economies.
Technically, USDINR turned bullish after breaking
out a short term consolidation resistance of 67.30. Since 29 April 2016 pair
has been traded in between 66.55-67.30 range.
A long bullish candle stick formation on EOD
chart, and closing above the 38.2% Fibonacci of its previous fall is also
supporting for bullish view in near term.
Hence, any dip towards 67.20-67.30 is expected to
give opportunity to build up long position for the target 67.55-67.80.
DOLLAR INDEX- Bullish above 95.50 (LTP : 95.29)
Important Data and Event
Prelim GDP q/q
Dollar index continued its recent bullish trend and
tested seven week high against its major currencies after the Federal Reserve
meeting minutes signaled an interest rate hike could happen as soon as June,
the currency also received some boost on New York Federal Reserve President
William Dudley comment that the US economy could be strong enough to raise
interest rate as soon as June.
The US CPI recorded their biggest increase in more
than three years in April at 0.4% also added bullishness in the currency.
Technical, dollar index tested our predicted level of 95.00-95.50 levels as was
expected since 9 May 2016.
The three consecutive bullish rally has
constructed an three white soldiers candle stick pattern which aiming for
96.50-97.00 next upside move. Further, dollar index would need to break above
the 95.50 in order to give next upside move.
On the downside, first immediate support is seen at
below 95.00 and sustain trade below only dollar index may retest 94.75-94.50.
EUR-INR May Future
Recommendation
Sell around 76.70-76.80 Target 76.20-75.80 Stop
loss above 77.00. (LTP : 75.83)
Important factor/data from Europe:
German ZEW Economic Sentiment
EURINR swung in between gain and loses last week as
a positive rally in dollar witnessed sharp fall towards 75.50 levels, while a
positive Current account surplus data from Euro zone which increased to a
four-month high in March and ECB April policy meeting minutes that showed that
there was general agreement among council members that the ECB's monetary
policy was working and that there was some reason to be mildly upbeat about economic
prospects brought some strength in the EURINR.
Technically, weekly price action resulted in
formation of hammer candle stick, while EURINR failed to settle below the
medium term trend line support both of which is indicating for bullish
reversal. Further, a break below 75.50 only could extend the fall in EURINR may
test 74.80-74.50.
GBP-INR May Future
Recommendation
Buy around 97.50-97.60 Target 98.00-98.50. Stop
loss below 97.10. (LTP : 98.38)
Important factor/data from U.K.
Second Estimate GDP q/q
GBP-INR witnessed an impressive gain last week despite
a stronger dollar that was boosted by U.S. FOMC April meeting minutes. Currency
pair printed its two-week high after the release of better than expected UK
retail sales data which showed volumes were up 1.3% month-on-month in
April.
The upbeat data suggest that consumer
confidence appears strong in the UK despite uncertainty of the outcome of the
Brexit referendum in June. Meanwhile, recent polls have shown that the number
of Britons in favor of remaining in the EU is pushing ahead versus those who
want the UK to leave.
Technically, after hitting a low of 95.95, GBPINR
witnessed sharp bounce back and tested 98.5925. A long bullish candle stick
formation on weekly chart is yet indicating for bullishness in
GBPINR.
Hence, any dip towards 97.50-97.60 is expect to
attract huge buying activities for the target 98.50-98.80 again.
JPYINR May Future
Recommendation
Sell around 61.65-61.75 Targets 61.10-60.60. Stop
loss above 61.95 (LTP: 61.47).
Important factor/data from Japan.
Tokyo Core CPI y/y
Japanese was unable to found support from strong
data as it fell against other currencies and depreciated more than 1.20%
against the dollar and down 0.37% against Rupee. March machinery
orders in Japan rose by 5.5% month-on-month, beating estimates of a 0.5%
increase. Yen weakened as dollar continued to strengthen on
increasing bets for a Federal Reserve rate hike.
Further, Yen also weakened after surge in
crude oil price lowered safe-haven demand for yen. Oil prices
rose as turmoil in Nigeria and crisis in Venezuela eased fears of continued
supply glut.
Technical, JPYINR retraced from 61.6775 and tested
61.00 before closing at 61.24; it failed to break crucial support of
60.90.
This week, pair may take short term
pullback towards 61.65-61.80 following closing above the SMA. Further, a break
below 60.90 only appears to take correction towards 60.55-60.30.
High Impact Economic Data & Events Schedule during the week
|
Date
|
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Impact
|
|
24.05.16
|
2:30pm
|
EUR
|
German ZEW Economic
Sentiment
|
12.1
|
11.2
|
Positive
|
|
25.05.16
|
1:30pm
|
EUR
|
German Ifo Business Climate
|
106.9
|
106.6
|
Positive
|
|
26.05.16
|
2:00pm
|
GBP
|
Second Estimate GDP q/q
|
0.40%
|
0.40%
|
Neutral
|
|
6:00pm
|
USD
|
Core Durable Goods Orders
m/m
|
0.30%
|
-0.20%
|
Positive
|
|
|
USD
|
Unemployment Claims
|
275K
|
278K
|
Neutral
|
||
|
27.05.16
|
6:00pm
|
USD
|
Prelim GDP q/q
|
0.80%
|
0.50%
|
Positive
|
