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Rupee Advances on Stronger Economic Data - HDFC Securities
Indian rupee likely to consolidate in coming days as at one end foreign funds are selling in domestic equity, higher crude oil prices putting pressure while weaker dollar against major trading currency will support rupee higher. The recovery in industrial production hinting for improvement in domestic macro level.
RBI is now keeping the banking system flush with liquidity, and this bodes well for economic recovery. There was a liquidity surplus in the banking system of 1.1 trillion rupees at the beginning of July. This will support the sentiment for forex traders.
India’s forex reverse kitty continued to surge for the fourth successive week to scale a new lifetime high of USD 429.911 billion, after a heavy increase in the value of gold and currency assets during the week to July 5.
India CPI reading for June comes in at 3.2% YoY, marginally higher than estimates of 3.10% and May’s 3%. The core CPI has been on a continuous decline since Oct 18 and is currently at 4.1% YoY. In near term, inflation likely to remain higher amid delay in monsoon and dovish central bank policy.
Industrial production growth for May month come in at 3.1% higher than expectation of 2.90%. The reading indicates a more broad based weakness Barring consumer non durable segment, all other components of IIP data have registered a decline.
Asian emerging-market currencies were slightly higher after China’s economic growth data came in line with estimates.
China’s economy slowed to the weakest pace since the early 1990s amid the ongoing trade standoff with the U.S., while monthly indicators provided signs that a stabilization is emerging. Gross domestic product rose 6.2.% in the AprilJune period from a year earlier, below the 6.4% expansion in the first quarter
USDINR JULY FUT. TECHNICAL OUTLOOK
USDINR July Futures : Sell Below 68.30 SL 69.05 Target 67.30
USDINR July futures trading well below short term moving averages.
Momentum oscillator, RSI is forming positive divergence and exiting from the oversold zone indicating short covering bounce.
The pair is forming lower highs and lows on daily and weekly chart.
The bias will turn further bearish once 68.30 level breaks.
EURINR JULY FUT. TECHNICAL OUTLOOK
EURINR July Futures: Sell on Rally around 77.95 SL 78.80 Target 76.70
The pair has broken the horizontal channel support of 77.45.
Momentum oscillator, RSI given positive cross over and exited from oversold zone.
The pair has been forming lower highs and lows on daily and weekly chart.
The medium term outlook for EURINR July future is bearish with sell on bounce.
GBPINR JULY FUT. TECHNICAL OUTLOOK
GBPINR July Futures: Sell Below 85.55 SL 86.50 Target 84.20.
GBPINR July Futures forming lower highs and lows on daily chart.
It has been trading well below short term moving averages. Momentum oscillators exited from oversold zone but did not given any price confirmation.
GBPUSD has been trading in falling channel since start of the April and forming lower highs and lows.
It is having resistance at 1.2600. Short term view remains bearish with downside support at 85.55.
JPYINR JULY FUT. TECHNICAL OUTLOOK
JPYINR July Futures: Sell Below 62.90 SL 63.70 Target 61.60.
JPYINR broken the rising trend line support at 64.
Momentum oscillator RSI has given negative divergence with price made higher highs but oscillators made lower highs.
JPYINR is having support at 62.90 and resistance at 64.75.
The pair has started trading below short term moving averages. The short term bias will turn bearish on breach of the 62.90
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HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475
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