5th September: Currency futures report: MCX-SX/NSE

Insignia Consultants

Friday, September 05, 2014

TIME: 09:22 am IST               

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CURRENCY FUTURES – MCX-SX/NSE DAILY TECHNICAL VIEW

 (All prices are in Indian rupees below in this report)

Headline: Rupee mild weak after euro crash.

The chances of a rupee weakening past 61.00 against the US dollar is very high. US dollar gains after the ECB interest rate cut and fears that the Reserve bank of India will intervene if and when rupee nears 60.00 will prevent big gains for the rupee. There is already speculation that Indian stock markets can correct anytime soon. But expectations of increased investment by pension funds in stock markets can result in higher volatility in rupee.

European central bank (ECB) cutting interest rates is a deliberate move to use currency depreciation as a means to an export led recovery and more so in the face of Russian counter sanctions. Globally if currency values reflect economic fundamentals then the US dollar – Japanese Yen fair value should over 125, the Euro-US dollar fair value should be below 1.10, the UK Pound – US dollar value should be over 2.00, the US dollar-Indian Rupee fair value should be around 58. NATO nations are notorious in manipulating currencies for their own economic purposes and also for black mailing emerging markets and other nations. This is what the Federal Reserve and the European central bank are doing. One is following a stronger US dollar and the other a weaker euro policy. 

Remain on the sidelines for usd/inr. There is a medium term technical breakdown in euro/inr and gbp/inr.

Usd/inr September 2014:  It can rise to 60.86 and 61.14 as long as it trades over 60.58. There will be sellers only below 60.58.

Euro/inr September 2014: Key support is at 78.51. There will be another wave of selling below 78.51 to 78.30 and 77.7595. A daily close below 78.51 today and an open below 78.51 on Monday will result in 76.75 by next week.

Gbp/Inr September 2014: Cable needs to trade 99.00 to rise to 99.36-99.76. There will be a technical break down below 99.00 to 98.2175. A daily close below 99.00 today and an open below 99.00 on Monday will be hyper bearish for cable.

Jpy/Inr September 2014: Overall bearish below 57.77 with 57.73 and 57.15 as price targets. Only a consolidated break of 57.77 will result in 58.02 and 58.29.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Website www.insigniaconsultants.in, www.insigniaindia.com.

Print this report only if absolutely necessary. Save Paper. Save Trees.

NOTES TO THE ABOVE REPORT

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.

ALL PRICES ARE IN INDIAN RUPEE UNLESS OTHERWISE SPECIFIED

THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT

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