Dollar/Rupee plunged nearly 1% since start of the week on waning fears of near-term Fed rate hike
Dollar/rupee fell during early morning trades Wednesday tracking the
weakness in the greenback amid firm local stocks.
Dollar plunged to over four weeks low as investors continued their
speculations that the Federal Reserve may delay its rate hike timing in 2016.
Dollar index, which weighs the greenback against six major currencies,
traded at over four-week lows of 93.70, last seen on May 9, during early Asian
trade Wednesday and compared to 94.01 at close New York time on Tuesday.
Technical, USD-INR extended its recent bearish trend for fourth
consecutive day and settled down by 0.37% at 66.9975 levels. Near term trend
expect to remain bearish following to long bearish candle stick formation on
EOD chart, but pair would need to trade below 66.88 its next support which is
coincide with previous swing low.
On the upside, failure of the breakdown only could set pullback
towards 67.45-67.65 again.
Strategy : Sell USDINR below 66.88 Target 66.60 Stop loss above
67.00
Yen rebounded after the economy met an expected growth pace
The yen gained Wednesday after the economy met an expected growth pace,
while the current account surplus came in narrower than expected with the
Aussie down on weak housing-related data.
JPY/INR changed hands at 62.4025, up 0.43%.
Japan's gross domestic product was revised up to 0.5% on quarter in the
first quarter of 2016, the Cabinet Office said on Wednesday.
That was in line with expectations following last month's preliminary
reading for a 0.4% gain. That followed the 0.4% contraction in the previous
three months.
On a yearly basis, GDP was revised up to 1.9% - again in line with
expectations and up from 1.7% in the preliminary reading. It contracted 1.1% in
the previous three months.
In China, a trade balance surplus of $49.98 billion was just shy of the
expected $50 billion for May on imports eased 0.4%, less than the 6.0% drop
seen and exports that fell 4.1%, more than the expected decline of 3.6%
year-on-year .
Technical
JPYINR failed to break 62.90 and retraced more nearly 1% compare to
previous close of 62.7275 levels. This strong downside move after the inverted
hammer candle stick formation has shifted the short term bias to
bearish.
Further, RSI 14 and its 9 SMA negative divergence is also
supporting for bearish outlook in JPYINR
Strategy - Sell JPYINR around 62.55-62.60 Target 62.20-62.00. Stop loss
above 62.75.
EURINR rebounded slightly on upbeat euro-zone econ data amid weak dollar
Euro traded higher Tuesday after euro area economy grew more than
expected in the first quarter amid weakness in the dollar.
Meanwhile, on a yearly basis, GDP growth held steady at 1.7% in the
first three months of 2016. The first quarter growth was revised up
from 1.5%.
Also, the expenditure-side breakdown of GDP showed that
household spending gained 0.6% and government expenditure rose 0.4%. Investment
reported a sequential growth of 0.8%.
The exports and imports of the euro-area moved up 0.4% and
0.7%, respectively in the first quarter.
After hitting a high of 76.3175, EURINR retraced towards 76.07 and
settled at 76.08 levels. Intraday price action resulted in formation of bearish
harami candle stick pattern which suggest for bullish trend reversal.
On the other hand, pair would need to trade above 76.40 in order to test
76.80-77.00 on the upside.
Strategy - Sell EURINR around 76.20-76.25 Target 76.00-75.80. Stop loss
above 76.38.
OR
Buy above 76.40 Target 76.70-76.90. Stop loss below 76.25.
GBP witnessed recovery rally and tested at 1-wk high, weak dollar post Fed Yellen comments
Pound traded at one-week high Tuesday on short-covering after two
'Brexit' polls lowered bets of Britain's exit from the European Union and
Federal Reserve Chair Janet Yellen failed to offer fresh clue on next rate
hike.
A trend reversal candle stick resulted in more than 0.78% recovery in
GBPINR and after hitting a high of 98.2450 pair settled at 97.72. Near term
trend is expect to remain volatile amid snaky headline from Brexit poll.
Further, immediate resistance is seen at 98.30 sustain trade above
only will expect to test 98.60 and above.
Strategy : Sell GBPINR around 97.50-97.60 Target 97.25-97.00. Stop loss
above 97.75.
Major Economic Data &
Events Schedule today
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Possible Impact
|
5:20am
|
JPY
|
Current Account
|
2.04T
|
1.89T
|
Positive
|
JPY
|
Final GDP q/q
|
0.50%
|
0.40%
|
Positive
|
|
JPY
|
Bank Lending y/y
|
2.20%
|
|||
JPY
|
Final GDP Price Index y/y
|
0.90%
|
0.90%
|
Neutral
|
|
Tentative
|
CNY
|
Trade Balance
|
358B
|
298B
|
Positive
|
Tentative
|
CNY
|
USD-Denominated Trade Balance
|
55.8B
|
45.6B
|
Positive
|
10:30am
|
JPY
|
Economy Watchers Sentiment
|
43.4
|
43.5
|
Negative
|
2:00pm
|
GBP
|
Manufacturing Production m/m
|
0.10%
|
0.10%
|
Neutral
|
GBP
|
Industrial Production m/m
|
0.00%
|
0.30%
|
Negative
|
|
7:30pm
|
GBP
|
NIESR GDP Estimate
|
-
|
0.30%
|
-
|
USD
|
JOLTS Job Openings
|
5.82M
|
5.76M
|
Positive
|
|
10:31pm
|
USD
|
10-y Bond Auction
|
-
|
1.71|2.7
|
-
|
