Monday, 5 December 2016

Currency Outlook for weekending 9 Dec 2016




USDINR December Future

Sell around 68.75-68.85 Target 68.35-68.10. Stop loss above 69.05

USDINR has stalled its recent bullish trend that started from first week of November 2016.  December Future retraced from the weekly high 68.9875, and settled at 68.3725 down 0.39% on selling by exporters, corporate inflows amid somewhat profit booking in dollar ahead of US non-farm payrolls data. 



Technical, on the weekly chart, USD-INR December Future failed to break its long term trend line resistance and formed shooting star candle stick both of which indicating for temporary correction in USDINR. 

However, global aspects like recent bullish trend in dollar index amid Fed rate hike hope is yet creating probability for upside trend in the USDINR. 

But, pair would need to trade above its immediate resistance 69.05 in order to test 69.35-69.55 then 69.60.


Dollar Index Crucial support 99.80

Dollar retraced 0.45% and settled at 101.02 compare to previous week close of 101.48 levels. It tested weekly low 100.67 after the release of the latest US jobs report. Dollar found support on Wednesday after the OPEC reached an agreement on an oil output cut aimed at tackling global oversupply and shoring up prices. 




Technically, trend reversal candle stick formation on the weekly chart is indicating for temporary correction before any next bullish move in dollar index. For this week 100.60 will act as a immediate support and sustain trade below could trigger correction in the dollar, however downside move could be limited towards 99.80 and possible bounce back could come from 99.80-100 levels. 

On the other hand a break below 99.75 likely to extend correction towards 98.85.




EURINR December Future

Sell below 71.98 Target 71.60-71.20. Stop loss above 72.25.

EURINR witnessed recovery from the weekly low of 72.67 and tested 73.28 before closing at 2.83 levels. This week, results of the Italian referendum on constitutional reforms this Sunday may drag volatility in the EUR. 

Italian prime minister Matteo Renzi is likely to resign if the result is a “no” vote and this may lead to an early general election, causing political uncertainty, which markets do not like, while ECB monthly policy will be the second important trigger for it. 




Technical, since 6 November 2016 EURINR continued to trade below its medium term consolidation breakdown which still pointing for bearishness in near term. Further, pair would need to trade above 73.80 in order to test 74.40-74.80.



GBPINR December Future

Buy above 86.35 Target 86.90-87.20. Stop loss below 86.05


Pound gained more than 0.85% last week, and rose towards two monthly high on the prospect of the U.K. retaining preferential access to the European Union’s single market as Brexit Secretary David Davis said the U.K. would consider making contributions to the EU in order to secure the best possible access to the single market. 


 


Technically, on the weekly chart pair failed to break its previous swing low of 84.18 and settled on verge of 61.8% Fibonacci Retracement levels.  Hence, pair would need to trade above 86.35 in order to show positive move 86.85-87.50, else short term correction could expect towards 85.85-85.30 with stop loss above 86.35.


JPYINR December Future

Sell below 59.90 Target 59.45-59.00. Stop loss above 60.10.

JPYINR extended its recent bearish trend and drop more than 1.20%. Sell strategy given below 60.80 was initiated and almost hit first predicted level of 60.00 as risk appetite improved while the dollar gained after data showed US economy grew more than preliminary estimates in the third quarter raising expectations of a Federal Reserve rate hike in December. 


 



Technically, on the weekly chart JPYINR trading on verge of long term trend line support. This week, a breakdown 59.90 could bring decent fall towards 59.45-59.00 and below.



High Impact Economic Data & Events Schedule during the week


Date
Time
Currency
Economic Indicators
Forecast
Previous
Impact
04.12.16
All Day
EUR
Italian Constitution Amendment Vote
-
-
-
05.12.16
 3:00pm
GBP
Services PMI
54.2
54.5
Negative

8:30pm
USD
ISM Non-Manufacturing PMI
55.3
54.8
Positive
07.12.16
3:00pm
GBP
Manufacturing Production m/m
0.20%
0.60%
Negative
08.12.16
Tentative
CNY
Trade Balance
307B
325B
Negative

6:15pm
EUR
Minimum Bid Rate
0.00%
0.00%
Neutral

7:00pm
EUR
ECB Press Conference
-
-
-


USD
Unemployment Claims
272K
268K
Negative
09.12.16
8:30pm
USD
Prelim UoM Consumer Sentiment
94.3
93.8
Positive
 



More will Update soon...