Dollar Index
Dollar index has stalled its recent bearish trend that started
from 29 Feb 2016, and recovered more than 0.82% last week. The greenback rose
against its major rivals on Thursday followed by comments from Federal Reserve
reiterating possibility of a Fed rate hike in near-term while it recovered
additional boost after upbeat retail sales data.
Technically, bullish piercing line pattern resulted
positive move from the 93.88 to towards 94.84 levels. Short term trend is
looking positive following to the strong trend reversal signal on the weekly
chart, that’s aiming for 95.00-95.50 next upside move.
On the downside, first immediate support is seen at below 92.90
sustain trade below only dollar index may retest 92.50-92.00.
USDINR May Future
Sell around 67.00-67.10 Target 66.75- 66.55. Stop loss above
67.30 (LTP 66.93)
Or
Buy above 67.30 Target 67.45-67.60. Stop loss below 66.90
Important factor/data from India
WPI inflation (Previous -0.85%)
Dollar/Rupee remained range bound for second consecutive week
and after hitting a low of 66.6150 settled at 66.93 as weak economic data from
Chinese raised concerns about the recovery in the global economic contributed
weakness in local currency, while dollar found some support against the Rupee
and other currencies after Federal Reserve officials hinted at near term Fed
rate increase amid concerns over possible exit of UK from European
Union.
Adding to this, dollar buying by nationalized banks on behalf
of oil importers further kept the USD-INR above its previous swing low of
66.5250.
Technically, USD-INR has turned neutral since 2 May 2016 and
squeezed in a cluster of support 66.55 and resistance of 67.30. In near term,
USD-INR expect to continued its short term consolidation unless it give either
side break, and any rise towards 66.95-66.15 is appear to set short term
selling activities.
On the upside a break above 67.30 could result bullish move
towards 67.80-68.00.
EUR-INR May Future
Recommendation
Sell around 76.70-76.80 Target 76.20-75.80 Stop loss above
77.00. (LTP : 76.00)
Important factor/data from Europe:
Final CPI y/y
Euro continued its recent bearish trend tracking the dollar
strength. A weaker than
expected Euro Zone Industrial Production report and renewed worries over
Greece’s future in the single currency bloc as well as the upcoming Spanish
general election contributed selling activities in the pair. Weak IIP, GDP and
other mixed economic data from Euro zone released in the last week is further
indicating that the Euro Zone is facing a subdued economic, including
uncertainty over the state of the global economic recovery, emanating in
particular from the slowdown in China.
Technically, near term trend yet looking bearish following the
rising channel line pattern. On the upside, term resistance is seen at 77.40
and a break above only could expect to show upside move towards 77.80-78.00 and
above.
GBP-INR May Future Recommendation
Sell around 96.80-96.90 Target 96.20-95.80 Stop loss above 97.10
(LTP: 96.51).
Important factor/data from U.K.
Claimant Count Change.
Pound extended its recent bearish trend for second week as
concerns over possible exit of UK from European Union continued pressurized the
currency.
Dollar index which strengthened more than 2% after Federal
Reserve officials hinted at near term Fed rate increase also contributed d
weakness in the GBP. Pound weakened also as UK March industrial and
manufacturing production fell short of expectations, while BOE hold its
benchmark interest rate at 0.50% and cut its growth forecast for the second
quarter to 0.3%, compared to the prior estimate of a 0.5% expansion.
Technically, short
term sentiment has been shifted in bearish trend and GBP-INR expect to retraced
towards 95.50-95.00 again following to the strong resistance of 98.35 coincide
with 61.8% Fibonacci
Retracement of previous fall. On
the other hand, GBP-INR would need to trade above 98.30 in order to test
99.00-99.50.
Japanese yen
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.
Prelim GDP q/q
Yen extended its fall for second week on renewed speculation
about the monetary policy easing in Japan and the U.S. will diverge further
while greenback recovered more than over 2% in the last two days on verbal
intervention by the Japanese policymakers.
Bank of Japan's Governor Haruhiko Kuroda on Thursday said
that the central bank will take additional easing action to achieve its
inflation target and including Finance Minister Taro Aso, reiterated this week
that the government can intervene to stabilize foreign-exchange markets if
necessary also weighed on sentiment.
A formation evening doji star stick formation on weekly chart is
indicating for bullish trend reversal in JPY-INR. Further, a break above 63.15 only
could expect to show next bullish move towards 63.50-64.0.0
High Impact Economic Data & Events Schedule during the week
|
Date
|
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Impact
|
|
17.05.16
|
2:00pm
|
GBP
|
CPI y/y
|
0.50%
|
0.50%
|
Neutral
|
|
6:00pm
|
USD
|
Building Permits
|
1.13M
|
1.09M
|
Positive
|
|
|
USD
|
CPI m/m
|
0.40%
|
0.10%
|
Positive
|
||
|
USD
|
Core CPI m/m
|
0.20%
|
0.10%
|
Positive
|
||
|
18.05.16
|
2:00pm
|
GBP
|
Average Earnings Index 3m/y
|
1.70%
|
1.80%
|
Negative
|
|
GBP
|
Claimant Count Change
|
4.1K
|
6.7K
|
Positive
|
||
|
11:30pm
|
USD
|
FOMC Meeting Minutes
|
-
|
-
|
-
|
|
|
19.05.16
|
2:00pm
|
GBP
|
Retail Sales m/m
|
0.70%
|
-1.30%
|
Positive
|
|
6:00pm
|
USD
|
Philly Fed Manufacturing Index
|
3.20
|
-1.60
|
Positive
|
|
|
USD
|
Unemployment Claims
|
276K
|
294K
|
Positive
|
||
|
20.05.16
|
Day 1
|
ALL
|
G7 Meetings
|
-
|
-
|
-
|
|
21.05.16
|
Day 2
|
ALL
|
G7 Meetings
|
-
|
-
|
-
|
