Report From 15 19 January, 2018 Important Highlights European Central Bank December meeting minutes signaled that the central bank may phase out the asset purchase program sooner than investors forecast. Japan economic front, a current account surplus of Y1.347 trillion in November, said the Ministry of Finance on Friday down 5.6% on year. UK's trade in goods deficit with the rest of the world was the biggest in five months in November, rising to GBP12.2 billion from GBP11.7 billion in October. U.K. Industrial production was stronger than expected, increasing by 0.4% in November following a 0.2% rise in October. BOJ reduced its purchase of Japanese government securities with maturity of 10 25 years left to maturity and those with 25 40 year maturity by 10 billion yen, Reuters reported Tuesday. India industrial output grew an annual 8.4 per cent in November, sharply higher than the downwardly revised 2 per cent in the previous month and 5.1 per cent a year ago. U.S. Consumer Price Index excluding the volatile food and energy components rose 0.3 percent last month also as prices for new motor vehicles, used cars and trucks and motor vehicle insurance increased. Germany's two biggest political parties, the CDU/CSU and SPD, reached a preliminary deal on a formal coalition, paving a way for forming a government. FRO FROM RESEARCH DESK Weekly Change & Technical levels NSE/BSE/MSEI January Future Currency LTP Wk % Pair Change R1 R2 Pivot S1 S2 USDINR 63.72 0.36 64.0133 64.2867 63.6967 63.4233 63.1067 EURINR 77.30 0.90 77.7300 78.1300 76.9300 76.5300 75.7300 GBPINR 86.83 0.96 87.2000 87.5000 86.6000 86.3000 85.7000 JPYINR 57.40 2.17 57.8433 58.3067 56.9567 56.4933 55.6067 Currency against U.S. dollar Currency LTP Wk % Trend Pair Change R1 R2 S1 S2 (wk) DOLLAR INDEX 90.62 1.23 91.0633 91.5067 90.3633 90.1067 Bearish EURUSD 1.2197 1.40 1.2221 1.2246 1.2176 1.2156 Bullish GBPUSD 1.3726 1.13 1.3754 1.3782 1.3694 1.3662 Bullish USDJPY 111.06 1.77 111.4233 111.7867 110.7733 110.4867 Bearish Foreign exchange reserves, in billion $ Jan 5, 2018 Total Reserves $411.12 bln up $1.75 bln Change in$ (Wk) Seema Yadav Research Analyst Tel: +91 0731 4262702 seema.yadav@indianivesh.in IndiaNivesh Securities Limited SEBI Registration No.INH000000511 601 & 602, Sukh Sagar, N. S. Patkar Marg, Girgaum Chowpatty, Mumbai 400 007. Tel: (022) 66188800
USD INR January Future LTP Sell around 1 Target 2 Target Stop loss 63.74 63.80 63.85 63.40 63.25 64.05 Dollar/rupee has stalled its recent bearish trend and recovered more than 0.36% last week. However, drastic fall in U.S. dollar against the major peers has restricted gain and USDINR retreated from the weekly high 63.9775, settled at 63.72 levels. Sharp rise in the euro and pound which surged more than 1% on reports of coalition talks between Germany's two political parties weighed on the dollar. Further, domestic factory data remained somewhat favorable for the Rupee which could support in near term. Technical, Sell strategy given below 63.40 was initiated but failed to test 63.00 levels as USDINR rebounded from the weekly low 63.38 levels. However, on the weekly chart pair yet trading below its massive resistance 64.05 which is creating probability for weakness in the pair and any rise towards 63.85 is expect to attract selling activities unless it gives a closing above 64.10. A break above only cold expect to test 64.50 and above. Dollar Index Dollar witnessed 1.23% drastic and tested its lowest levels since Jan 2015, settled at 90.62 levels. It saw drastic fall after euro rose sharply on reports of coalition talks between Germany's two political parties. Dollar has been under heavy pressure last week, and even though China retracted those earlier comments also failed to give support. Also, Bank of Japan's move to trim Japanese government bond (JGB) purchases in the previous session triggered speculation that it could begin tapering its massive, ultra easy monetary stimulus also lifted weakness in the dollar. Technically, On the above chart, dollar index has broken its important support 92.35 which is coincided with July 2017 swing low and formed a long bearish candle stick on the weekly chart both of which are indicating bearishness and dollar may test 90.24 and below very soon.
EUR INR January Future LTP Buy around 1 Target 2 Target Stop loss 77.30 77.05 77.10 77.35 77.70 76.80 Euro/Rupee jumped over 1.45% last week, and tested its three year high on Friday. Abrupt bullish rally was noted on reports of coalition talks between Germany's two political parties. Germany's two biggest political parties, the CDU/CSU and SPD, reached a preliminary deal on a formal coalition, paving a way for forming a government. Also, the rise in euro was previously supported after European Central Bank minutes hinted, yesterday, tighter monetary policy ahead. Technically, after hitting a weekly low 76.1375, EURINR saw sharp pullback and tested 77.3350 levels before closing at 77.33. A descending triangle pattern breakout was found on the weekly chart which is indicating for bullishness in near term. On the downside, 76.20 will act as a crucial support for the week and break below only could show next downside move towards 75.00. GBP INR January Future LTP Buy around 1 Target 2 Target Stop loss 86.83 86.95 87.35 87.70 83.55 Pound/rupee had a remarkable second week of 2018 as pair jumped towards its highest level since June 2016 Brexit referendum. Although in start of the week pair saw downside pressure amid political jitters with UK government reshuffling, but it was able to trade above its previous week low unaffected by reports of massive labor market outflows and investment and output losses following possible disorderly Brexit scenario. Further, reports that several EU member countries are open to the idea of a softer Brexit, easing worries the EU may adopt a tough stance on trade discussions with Britain has sparked the pound against the dollar. Technically, a long bullish candle stick formation on the weekly chart is indicating for bullish trend in GBPINR. Buy strategy given last week was hit both predicted level 86.60 86.65. Near term GBPINR may test 87.30 next resistance levels. On the downside, crucial support is seen at 85.95 sustain trade below only could expect to test 85.60 85.30 levels.
JPY INR January Future LTP Buy above 1 Target 2 Target Stop loss 57.40 57.50 57.80 58.00 57.25 JPYINR witntessed more than 2% rally last week. Bank of Japan's announced that it will buy less of long term securities which raised fears that the Japanese central bank may start unrolling its massive stimulus program in the near term has witnessed sharp up side move in yen. BOJ reduced its purchase of Japanese government securities with maturity of 10 25 years left to maturity and those with 25 40 year maturity by 10 billion yen, Reuters reported Tuesday. Further, weakness in the dollar also added somewhat strength in the Yen. Technical, Weekly price action resulted in formation of long bullish candle stick. Further, pair settled above 38.2% Fibonacci Retracement of its 3 Sep 2017 31 Dec 2017 fall both of which are appears for bullish outlook for JPYINR. On the upside, strong resistance is seen at 57.50 and break above it will expect to test 58.00 and above levels. High Impact Economic Data & Events Schedule during the week Date Time Currency Economic Indicators Forecast Previous Impact 16.01.18 3:00pm GBP CPI y/y 3.00% 3.10% Negative 17.01.18 3:30pm EUR Final CPI y/y 1.40% 1.50% Negative 5:15pm GBP MPC Member Saunders Speaks USD Industrial Production m/m 0.30% 0.20% Positive 18.01.18 3:00am USD FOMC Member Mester Speaks 12:30pm CNY GDP q/y 6.70% 6.80% Negative CNY Industrial Production y/y 6.10% 6.10% Neutral CNY Fixed Asset Investment ytd/y 7.10% 7.20% Negative 1:30pm EUR German Buba President Weidmann Speaks 7:00pm USD Building Permits 1.29M 1.30M Negative USD Unemployment Claims 251K 261K Positive USD Housing Starts 1.27M 1.30M Negative 9:30pm USD Crude Oil Inventories 4.9M 19.01.18 3:00pm GBP Retail Sales m/m 0.80% 1.10% Negative 8:30pm USD Prelim UoM Consumer Sentiment 97.20 95.90 Positive 10:45pm USD FOMC Member Quarles Speaks 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.
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