Currency Outlook - Dollar index down after China's upbeat Q2 GDP

Dollar/Rupee

Dollar rupee ended at one-month low Thursday on likely overseas fund inflows into local shares amid dollar selling by foreign banks and the dollar index traded down Friday from previous day as investors risk appetite for riskier assets surged after the Bank of England hinted it would launch fresh stimulus.

Technical, USDINR extended its recent bearish trend and after hitting a low of 66.9650 settled at 67.0125 levels.   A breakdown of crucial support 67.20 and Head & shoulder pattern breakdown is indicating for bearishness in USDINR and any rise towards 67.15-67.20 is expect to attract short term selling activities. 

on the upside, resistance is seen at 67.50 sustain trade above it will expect to test 67.75-67.90

EUR/INR

Euro little changed during afternoon trades Wednesday as investors across the globe await Bank of England monetary policy meeting due later tomorrow.

Sell strategy given around 74.70-74.80 was initiated, but pair yet to test predicted level of 74.25, day low as 74.3325 same as previous day low, while forming similar  bottom candle stick pattern.

 This formation is indicating for bearish reversal in EURINR towards 75.00-74.50 again.

 Further, pair would need to trade below its previous swing low in order to test 74.00-73.65 and below.

GBP/INR

The pound jumped to the highest level since late June against the dollar on Thursday after the Bank of England kept monetary policy unchanged; dashing expectations for a rate cut, but signaled that it will ease monetary policy at its August meeting.

The Bank of England surprised the market by keeping interest rates unchanged plunging investors risk appetite for safe-haven currencies.

 The Bank of England held its benchmark interest rate steady at a record low of 0.5% on 14 July. The monetary policy committee voted 8-1 to maintain the central bank's benchmark unchanged for another month. It was expected the Bank of England to cut interest rates by a quarter percentage point to 0.25% to help shore up the British economy in the wake of the June 23 vote to leave the European Union.

  The UK central bank officials said they expect to launch fresh stimulus on multiple fronts next month, as the economy stumbles under Brexit.  The BOE immediately announced that it had at least GBP250 billion ($331.11 billion) in cash ready to lend to any banks suffering funding problems.

After hitting a low of 88.4275 compare to previous day close 89.2275, GBPINR saw a sharp bounce back and tested 89.8175 levels. However, pair yet failed to break above 23.8% Fibonacci Retracement which is indicating for bearishness in GBPIN, unless pair gives a closing above 89.85. Above 89.85 will expect to test 90.25-90.50.

JPY/INR

Yen traded near three-week high Thursday as investors expect the Bank of Japan to ease in it policy meeting later this month after the government's dimmed outlook over the world's third largest economy.

JPYINR extended its recent bearish trend, and sell strategy given below 64.05 was successful with pair drop towards 63.25 before closing at 63.53.  A breakdown of double top pattern is found on EOD chart which is indicating for drastic fall in days to come and any rise towards 63.80-63.90 expect to attract huge selling activities. Stop loss above 63.10.

 Major Economic Data & Events Schedule today

Time	Currency	Economic Indicators	Forecast	Previous	Possible Impact
7:30am	CNY	GDP q/y	6.60%	6.70%	Negative
	CNY	Industrial Production y/y	5.90%	6.00%	Negative
	CNY	Fixed Asset Investment ytd/y	9.40%	9.60%	Negative
	CNY	NBS Press Conference	-	-	-
	CNY	Retail Sales y/y	9.90%	10.00%	Negative
15th-16th	CNY	M2 Money Supply y/y	11.40%	11.80%	Negative
15th-16th	CNY	New Loans	1000B	986B	Positive
1:30pm	EUR	Italian Trade Balance	3.27B	4.52B	Negative
2:00pm	GBP	Construction Output m/m	-1.10%	2.50%	Negative
2:30pm	EUR	Final CPI y/y	0.10%	0.10%	Neutral
	EUR	Final Core CPI y/y	0.90%	0.90%	Neutral
	EUR	Trade Balance	25.2B	28.0B	Negative
5:30pm	GBP	BOE Gov Carney Speaks	-	-	-
6:00pm	USD	CPI m/m	0.20%	0.20%	Neutral
	USD	Core CPI m/m	0.20%	0.20%	Neutral
	USD	Core Retail Sales m/m	0.40%	0.40%	Neutral
	USD	Retail Sales m/m	0.10%	0.50%	Negative
	USD	Empire State Manufacturing Index	5.1	6	Negative
6:45pm	USD	Capacity Utilization Rate	75.20%	74.90%	Positive
	USD	Industrial Production m/m	0.20%	-0.40%	Positive
7:00pm	GBP	CB Leading Index m/m	-	0.00%	-
7:30pm	USD	Prelim UoM Consumer Sentiment	93.7	93.5	Positive
	USD	Business Inventories m/m	0.10%	0.10%	Neutral
	USD	Prelim UoM Inflation Expectations	-	2.60%	-

 More will Update soon..