Dollar Index
The dollar turns lower after Bank of England refrained from
cutting its benchmark interest rate despite "Brexit" vote on its July
Policy meeting. Adding to this, China's posted second-quarter growth numbers
somewhat positive which eased concerns of a slowdown in Asia's largest economy
and an ongoing rally in global equity markets also added weakness in the
dollar.
Technically, on the weekly chart dollar index failed to cross
it’s near term resistance on closing basis and formed a high wave candle stick
which is indicating for indecisive trend in near term.
However, sustain trade below its near term resistance is
creating probability for the correction towards 95.10-94.80 again. On the
upside, dollar index would need to trade above 96.80 in order to test 98.45 and
above.
USD-INR July
Buy above 67.45 Target 67.75-67.90. Stop loss below 67.25
Or
Sell around 67.30 Stop loss above 67.45 Target 67.00-66.80.
USD-INR continued to weaken for third consecutive week and
tested its lowest level 66.9425 since June 2016 on selling by foreign banks
amid inflows into local debt and equities. However, dollar demand from
importers and overseas fund outflows triggered by quarterly results from IT
giants Infosys and Tata Consultancy Services Limited resulted in small recovery
towards 67.2250 on Friday.
Technically, Sell strategy given around 67.75 was not initiated,
as after pair remained below 67.50 levels. Weekly price action resulted in
formation of high wave candle stick which indicating for indecisive or trend
reversal in USDINR, however
sustain trade below 23.8%
Fibonacci retracement level of 21 Feb 2016 – 17 April 2016 is yet indicating
for continuation of recent bearish trend. Hence, any rises towards 67.60-67.70
expect to attract near term selling activities.
Further, massive resistance likely to seen at 67.95 and a break
above only will expect to test 68.25-68.50
EUR-INR July
Sell around 74.85-75.00 Target 74.20-73.75. Stop loss above
75.35
EUR-INR traded up for the third straight Friday after data
released showed inflation in the Eurozone turned positive as estimated Technically, after
hitting a low of 74.3325, EUR-INR witnessed small recovery and settled at
74.8125 levels.
On the weekly chart, pair still trading below the descending
triangle which was noted on 26 June 2016 is still indicating for bearishness in
EURINR, and any rise towards 74.90-75.00 is expect to attract huge selling
activities.
On the upside, massive resistance is seen at 75.50 and
break above is expect to show positive move towards 76.10-76.50 again.
GBP-INR July
Sell GBPINR around 89.65-89.75 Target 87.75-87.00 Stop loss
above 89.95.
GBPINR has stalled its recent drastic fall, and after hitting a
low of 86.6650 rebounded towards 90.3125. The decision to hold rates unchanged
at 0.50% helped extend the GBP-INR rally from November 2012 low.
However, the policy statement said most MPC members expect some
easing at the next meeting in August. Also, a news that Theresa May prepared to
take over as Prime Minister Hold the pair on upside as the news saw to reduce
political uncertainty that has lasted since the referendum.
Technically, a bullish engulfing line pattern was observed on
the weekly chart which is indicating for bullish reversal in GBPINR.
JPY - INR July
Sell below 63.52 Target 63.00-62.50. Stop loss above 63.75
Japanese safe haven plunged to its lowest level of June 2016
against the Rupee, first weekly drop since the results of referendum showed UK
citizens voted to end their 43-year old membership of the European Union on Jun
24.
The Yen gave up 5.48% on expectations of stimulus package
by Japanese government and falling safe-haven demand after better than expected
economic data from the world's second largest economy and the freshly
re-elected government lowered its growth and inflation outlook following announcement
of fiscal spending package.
Technically, buy above 64.40 was not initiated in JPYINR July
Future as pair remained below 66.89 in entire week.
Weekly price action resulted in formation of long bearish candle
stick which is indicating for continuation of recent bearish trend, but pair
would need to trade below 63.00 in order to test 62.50-62.00, else failure of
the break down could crate probability for recovery towards 64.20-64.80 again
High Impact Economic Data &
Events Schedule during the week
|
Date
|
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Impact
|
|
19.07.16
|
2:00pm
|
GBP
|
CPI y/y
|
0.40%
|
0.30%
|
Positive
|
|
2:30pm
|
EUR
|
German ZEW Economic Sentiment
|
8.2
|
19.2
|
Negative
|
|
|
6:00pm
|
USD
|
Building Permits
|
1.15m
|
1.14M
|
Positive
|
|
|
20.07.16
|
2:00pm
|
GBP
|
Average Earnings Index 3m/y
|
2.30%
|
2.00%
|
Positive
|
|
GBP
|
Claimant Count Change
|
4.1K
|
-0.4K
|
Positive
|
||
|
21.07.16
|
2:00pm
|
GBP
|
Retail Sales m/m
|
-0.40%
|
0.90%
|
Negative
|
|
5:15pm
|
EUR
|
Minimum Bid Rate
|
0.00%
|
0.00%
|
Neutral
|
|
|
6:00pm
|
EUR
|
ECB Press Conference
|
-
|
-
|
-
|
|
|
USD
|
Philly Fed Manufacturing Index
|
5.1
|
4.7
|
Positive
|
||
|
USD
|
Unemployment Claims
|
271K
|
254K
|
Negative
|
