Weekly Currency Report for Exporters and Importers :13th August 2018

Insignia Consultants

New Delhi

Saturday, August 11, 2018

FOREX SPOT WEEKLY TECHNICAL REPORT

(inter-bank prices below)

European banks are at risk due to Turkish crisis. It affects France and Italy more than Germany. Hedge funds have reduced bullish euro/usd bets and reduced net longs in euro/usd. I am not going to comment much on what will happen. Momentum is very bullish for the US dollar. Technically the US dollar Index is over brought. US dollar can fall anytime if Turkey bends a bit. The Turkey issue has taken away the US-China trade war focus.

Economic data releases has failed to affect the currency markets. UK economy is the second best developed nation after USA. Pound will rise sharply whenever focus is away from Brexit and Turkey. Global pessimism on economy and growth will result in fall in consumer confidence and business confidence for the time being. US stock markets can rise while rest of the world stock markets are standing on shaky foundation. Yen if it falls against the US dollar can target 105.50 and below in the short term.

US bond yields trend will affect everything. Even a 0.30% sustained rise in US bond yields can start another wave of rise for the US dollar. I expect central banks their plunge protection teams to intervene aggressively this week. 

India at a glance

If the US dollar continues to gain globally then rupee can rise to 69.88-70.25 zone this week. Reserve bank of India intervention will be the key if the rupee fall further. Global factors will dictate the rupee more than domestic factors. India does not have a big trade with Turkey. Turkey issue will have a negligent impact on Indian exports and Indian imports. Exporters and importers need to be very cautious due to holiday on 15^th August.

Euro-US dollar (euro/usd)

Current Market Price: 1.1381

Support: 1.1171-1.1229-1.1291-1.1319-1.1367

Resistance: 1.1464-1.1503-1.1593-1.1631-1.1682-1.1768

Weekly View:

·       200 week moving average at 1.1367 is the key long term support.

·       Immediate resistance is at 1.1464.

·       100% retracement is at 1.1313.

·       There will be another wave of sell off below 1.1313 to 1.1229 and 1.1171.

·       Small sell off will be there below 1.1367.

·       Euro/usd can rise to 1.1651 and 1.1768 if it does not fall below 1.1313.

·       Technically oversold. Momentum is bearish.

UK Pound -US dollar (gbp/usd)

Current Market Price: 1.2759

Support: 1.2480-1.2550-1.2626-1.2660-1.2728

Resistance: 1.2840-1.2917-1.2964-1.3062-1.3221

Weekly View:

·       Weekly resistance is at 1.2964.

·       100% retracement is at 1.2587. Cable can rise to 1.3062 and 1.3221 as long as it trades over 1.2587.

·       There will be another wave of sell off only below 1.2587.

·       Technically oversold. Momentum is bearish.

FOR FULL REPORT U NEED TO PAY/SUBSCRIBE