Nivesh Weekly Currency Report

Transcription

1 Report From 8 12 January, 2018 Important Highlights Euro zone Purchasing managers index for the manufacturing sector advanced in December at 60.6 from the 60.1 in month prior. US manufacturing purchasing managers' index (PMI), which rose to 55.1 in December, from the prior reading of It was the highest reading since March Minutes of the Federal Reserve's latest monetary policy meeting showed most participants reiterated their support for continuing a gradual approach to hiking interest rates. UK economic data front, construction PMI dropped to 52.2 in December, from 53.1 in November. German unemployment rate remained steady at 5.5% in December from last month. UK manufacturing sector grew on a slower pace, with its PMI fall to 56.3 from 58.2 in November. US initial jobless claims unexpectedly rose by 3,000 to 250,000 from the previous week's level, which was revised up by 2,000. Economists had been expecting a drop to 240,000. U.S. Nonfarm payrolls rose by 148,000 last month after a surge of 252,000 in November, the Labor Department said on Friday. Retail payrolls fell by 20,300 in December, the largest drop since March, despite reports of a strong holiday shopping season. U.S. unemployment rate was unchanged at a 17 year low of 4.1 percent. FRO FROM RESEARCH DESK Weekly Change & Technical levels NSE/BSE/MSEI January Future Currency LTP Wk % Pair Change R1 R2 Pivot S1 S2 USDINR EURINR GBPINR JPYINR Currency against U.S. dollar Currency LTP Wk % Trend Pair Change R1 R2 S1 S2 (wk) DOLLAR INDEX Bearish EURUSD Bullish GBPUSD Bullish USDJPY Bearish Foreign exchange reserves, in billion $ December 29, 2017 Total Reserves $ bln up $4.44 bln Change in$ (Wk) Seema Yadav Research Analyst Tel: seema.yadav@indianivesh.in IndiaNivesh Securities Limited SEBI Registration No.INH & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai Tel: (022)

2 USD INR January Future LTP Sell below 1 Target 2 Target Stop loss Dollar/rupee continued its recent bearish trend and tested fresh thirty month low. On Friday it tested levels on selling by foreign banks likely for exporters amid overall slump in the greenback. The dollar slumped against major currencies as investors bet on faster monetary policy tightening outside the US. Technical, Sell strategy given below was initiated with USDINR drop towards levels. On the weekly chart, pair trading on verge of crucial support and break below it only could extend the recent losses and it may test and below. On the upside, strong resistance is seen at breaks above only could expect to test levels. Dollar Index Dollar remained subdued against major currencies as there is absence of major triggers in the market. Investors refrain from taking positions waiting for fresh cues expected oiut of upcoming data, mainly December retail sales and inflation data in US, due for release later this week. Technically, On the above chart, dollar index has broken its important support which is coincided with July 2017 swing low. However, weekly price action resulted in formation of high wave candle stick which creating probability for temporary recovery before any next bearish move On the downside, crucial support is seen at below only will expect to test

3 EUR INR January Future LTP Sell around 1 Target 2 Target Stop loss Euro/Rupee retreated from the weekly high on Friday on profit booking by investors after the currency pair surged to four month high level post release of upbeat Euro zone purchasing manager s data in the previous session. Technically, on the weekly chart, EURINR has stalled its recent bullish move and retreated from the weekly high levels. Pair failed to break descending triangle pattern and formed a high wave candle stick which creating probability for indecisive move in days to come. On the upside, pair would need to break above for the confirmation. A break above is expected to witness abrupt bullish move towards and above. On the downside, will act as a crucial support for the week and break below only could show next downside move towards GBP INR January Future LTP Buy around 1 Target 2 Target Stop loss Pound/rupee traded off three month high Wednesday as investors booked their profits taking advantage of the rally amid dismal UK construction data. On the UK economic data front, construction PMI dropped to 52.2 in December, from 53.1 in November. Technically, GBPINR retreated from the weekly high and tested before closing at levels. Buy strategy given above failed to hit predict ted level In near term, any dip towards is expected to attract near term buying activities. On the downside, crucial support is seen at and break below only could test and below.

4 JPY INR January Future LTP Sell below 1 Target 2 Target Stop loss Yen drop to one week high Friday as investors grew cautious post release of lackluster Japan services sector purchasing manager index data. Meanwhile, the dollar remained subdued against major currencies as investors bet on faster monetary policy tightening outside the US. Technical, JPYINR failed to hold above levels and after hitting a weekly high retreated towards levels. Weekly price action resulted in formation of long bearish candle stick and also pair broke its crucial support both of which indicating for bearishness in near term. On the upside, strong resistance is seen at and break above it will expect to test levels. High Impact Economic Data & Events Schedule during the week Date Time Currency Economic Indicators Forecast Previous Impact :00pm GBP Manufacturing Production m/m 0.30% 0.10% Positive 9:00pm USD Crude Oil Inventories 7.4M :00pm USD PPI m/m 0.20% 0.40% Negative :00pm USD CPI m/m 0.20% 0.40% Negative USD Core CPI m/m 0.20% 0.10% Positive USD Core Retail Sales m/m 0.40% 1.00% Negative USD Retail Sales m/m 0.50% 0.80% Negative Note: Economic data expectations are based on median forecast by economists or Reuters and Bloomberg survey. Here positive impact indicates currency could appreciate and negative indicates currency could depreciate in comparison with US Dollar. Technical Chart Source:Tickerplant *DOS Depends on statement. DOV Depends on Votes. DOR Depends on Report.

5 IndiaNivesh Securities Limited SEBI Registration No.INH Lodha Supremus, 17th Floor, Senapati Bapat Marg, Lower Parel, Mumbai Tel (Board): Fax: e mail: research@indianivesh.in Website: Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (IndiaNivesh), for use by the recipient as information only and is not for circulation or public distribution. This document is not to be reproduced, copied, redistributed or published or made available to others, in whole or in part without prior permission from us. This document is not to be construed as an offer to sell or the solicitation of an offer to buy any currency pair. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or Completeness has not been verified by IndiaNivesh independently and cannot be guaranteed. Neither IndiaNivesh nor any of its affiliates, its directors or its employees accepts any responsibility or whatever nature for the information, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this material only. IndiaNivesh directors and its clients may have holdings in the currencies mentioned in the report.