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Forex Currency Market Technical Analysis Outlook Report : 05/12/2018
Forex Currency Market Technical Analysis Outlook Report : 05/12/2018
USDINR
- USDINR trading range for the day is 70.33-71.08.
- Rupee traded in range on likely outflows from local stocks, selling by oil importers amid likely inflows into local debt.
- The Reserve Bank of India (RBI) to support an economy that is losing momentum by leaving interest rates unchanged at a policy meeting.
- Intense government pressure on the RBI to remove some major curbs on lending ahead of the election also means it is likely to take a more dovish stance.
Indian Rupee depreciated by 0.13 percent despite dollar index weakening by 0.08 percent during the day mainly on account of sharp rise in crude oil prices. Meanwhile, overseas investors pumped Rs 12,260 crore into the Indian capital markets in November, making it the highest inflow in 10 months due to falling crude oil prices and sharp rupee appreciation.
FOMC announced their meeting minutes and as expected the Fed is likely to raise interest rates in their mid-Dec meeting. Donald Trump and Xi Jinping have reached a truce in the US-China trade war for a period of 90 days. US won’t be imposing additional tariffs on China. The current rate of 10 percent tariffs would remain on Chinese goods. Meanwhile, Donald Trump later tweeted that he will not hesitate to increase the tariffs on China post the negotiation p[period of if he feels the deal is not satisfactory. Non-manufacturing PMI from US came in 59.3 against market expectations of 57.5 for Nov’18
>> BUY USDINR ABV 70.65 SL BELOW 70.45 TGT 70.80-70.94. (BTST)
EURINR
- EURINR trading range for the day is 80.13-81.37.
- Euro gained as the dollar weakened as U.S. Treasury yields fell to three-month lows, with investors fretting over a possible pause in the Federal Reserve’s rate-hike cycle.
- Euro zone finance ministers said Italy’s draft 2019 budget was breaking European Union rules and they agreed with the European Commission that Rome should amend it.
- Italy PM says he’s not working on budget deficit below 2%
EURUSD depreciated by 0.07 percent yesterday while EURINR depreciated by 0.05 percent during the same time frame.
EU commission had rejected Italian budget and asked them to revise their spending plans. Italy is ready to revise its budget deficit by 0.2 percent down to 2.2 percent which is still above EU’s target of 2 percent. Italy’s PM assured that the revised budget will be ready soon. Meanwhile, manufacturing PMI from Euro zone came in at 51.8 against market expectations of 51.3 for Nov’18.
* SELL EURINR DEC 2018 @ 80.40 SL 80.70 TGT 80.20-80.00. NSE
GBPINR
- GBPINR trading range for the day is 89.53-91.61.
- GBP jumped after the European Court of Justice’s advocate general said Britain has the right to unilaterally withdraw its notice that it is leaving the European Union.
- British PM May said she would still be in her job in two weeks’ time, playing down speculation that she might resign if the Brexit deal is not approved.
- UK manufacturing sector expanded at the fastest pace in two months in November, exceeding expectations, survey data from IHS Markit showed.
GBP depreciated against the US dollar by 0.03 percent yesterday while GBPINR depreciated by 0.1 percent.
BOE published its report on Brexit, saying that in the worst case scenario, Brexit will lead to 8% fall in GDP short-term while the Pound could depreciate as much as 25 percent. Meanwhile, manufacturing PMI from UK came in at 53.1 for Nov’18 against market expectations of 51.6. Construction PMI from UK came in at 53.4 for Nov’18 against market expectation of 52.5. Earlier during the day pound bounced on the news that UK could cancel the Brexit unilaterally. However, later on PM May’s spokesperson said that Government does not want to cancel Brexit.
>> SELL GBPINR DEC 2018 @ 90.20 SL 90.60 TGT 89.80-89.40. NSE
JPYINR
- JPYINR trading range for the day is 62.08-63.38.
- JPY gained as the dollar fell as relief over the U.S.-China trade truce gave way to concerns that a full resolution to the trade conflict will be difficult to reach.
- Japan planning to invite US President Trump for visit in May or June: Asahi Shimbun
- The monetary base in Japan was up 6.1 percent on year in November, the Bank of Japan said – coming in at 501.330 trillion yen.
>> SELL JPYINR DEC 2018 @ 62.70 SL 62.95 TGT 62.48-62.32. NSE
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