Tuesday, 7 August 2018

Currency Update for Exporters and Importers :7th August 2018


Insignia Consultants
New Delhi
Tuesday, August 07, 2018
TIME: 9:08 am IST          
DAILY FOREX REPORT FOR EXPORTERS AND IMPORTERS
(inter-bank prices below)
US dollar is overbought. Momentum continues to be bullish. Pound gets knocked down by hard Brexit fears. Yen is stable. Difficult to predict when the US dollar will make a trend reversal. Strong US economic fundamentals (as compared to Eurozone, UK and Japan) is steering the US dollar Index higher and higher. It should be a technical trade.
India
Inflows into the Indian bond market by global investors can result in fall in the rupee. Over valuation of the rupee as compared to other nations will result in RBI intervention at lower levels. To me 67.60 (usd/inr) should be the limit which the RBI should defend for the rest of the year. Direction of the US dollar will dictate the rupee till tomorrow.
Japanese Yen/Indian Rupee (Jpy/inr CMP 61.8500):
One Support: 61.6125
One Resistance: 62.0050
o      Yen can rise to 62.0050 and 62.2150 as long as it trades over 61.6125.
o      Sell off will be there below 61.6125 this week.
Euro/US dollar (euro/usd CMP 1.1556):
One Support: 1.1505
One Resistance: 1.1628
o      It needs to trade over 1.1489-1.1505 zone till Thursday top rise to 1.1697 and 1.1723.
o      Trend is down.
o      Crash will be there if euro/usd trades below 1.1505.
UK Pound/US dollar (gbp/usd CMP 1.2940):
One Support: 1.2891
One Resistance: 1.2997
o      Cable can fall to 1.2831 as long as it trades below 1.2997.
o      Cable needs to trade over 1.2997 to rise further.
o      Technically oversold. One needs to look for signs of trend reversal.
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FAQ
Why Do I ask exporters and importers to use trailing stop loss? Some day’s currency markets are very volatile. Trend (short term as well as medium term) change at the flick of coin without any advance warning. In order to make the most of the volatility it is preferable to use trailing stop loss using technical analysis as basis. Those exporters and importers do not wish to take the risk, should take a forward cover or hedge in future and options market if export or import price near cost.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto currency, 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. Prepared by Chintan Karnani
NOTES TO THE ABOVE REPORT
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
ALL PRICES ARE IN INDIAN RUPEE UNLESS OTHERWISE SPECIFIED
Indian Standard Time (IST): +5:30 GMT
Current Market Price (CMP)
All foreign exchange prices are for inter-bank rates.

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