urrency Forecast

 
$ continued to weaken vs other major currencies

U.S. DOLLAR VS. INDIAN RUPEE

Resistance : 46.42/44, 46.55/56 Daily Trend : SIDE/DOWN

Support : 46.24/25 , 46.17/18 Weekly Trend : SIDE/UP
The Indian unit appreciated further against the dollar because banks sold the greenback noting rise in
local share indices and the euro. The Indian Rupee is trading at 46.3500-4000 per dollar. There might
have been some FII inflows today. Two foreign banks were the major sellers. However, dollar demand
from oil companies and other importers limited the rise in the Indian Rupee. 

TRADING STRATEGY :Buy @ 46.3000 for short term.

EURO VS. U.S. DOLLAR

Resistance : 1.2355/60, 1.2385/90 Daily Trend : SIDE/UP

Support : 1.2255/60 , 1.2215/20 Weekly Trend : SIDE/UP
The euro gained against the dollar following solid demand for European debt in auctions held in Ireland,
Belgium and Spain. However, the negative effects of the euro debt crisis resurfaced after Moody’s ratings
downgraded Greece’s bonds to junk status and following the poor ratings from German ZEW’s investor
sentiment survey. 

TRADING STRATEGY :Sell @ 1.2315 for short term.

BRITISH POUND VS. U.S. DOLLAR

Resistance : 1.4825/30, 1.4875/80 Daily Trend : SIDE/UP

Support : 1.4725/30 , 1.4680/85 Weekly Trend : SIDE/UP
The British pound strengthened against the dollar as risk appetite improved. Even as UK’s consumer
price inflation showed lower-than-expected data, investor’s appetite for riskier currencies created a
rebound for the sterling. Anticipate UK’s retail sales and jobs data to be released this week. 

UK Consumer Confidence from the Nationwide Building Society unexpectedly dipped to the lowest level
in 11 months. Details of the report revealed that the outlook on economic growth over the next 6 months
among polled respondents dipped to the lowest level since August 2009, likely reflecting expectations of
the fallout from the government’s austerity measures to be announced as part of an Emergency Budget
next week. 

TRADING STRATEGY :Sell @ 1.4810 for short term.

U.S. DOLLAR VS. JAPANESE YEN
Resistance : 92.00/05, 92.45/50 Daily Trend : SIDE/DOWN
Support : 91.20/25 , 90.80/85 Weekly Trend : SIDE/UP
The Japanese yen weakened across the board on improved risk appetite. Domestically, the Bank of
Japan left rates on hold and introduced a new $33 billion dollar industry-lending program, due this August,
which is aimed at raising productivity and creating consumer demand. 

Japan’s Tertiary Index of service demand rose for the first time in three months, adding 2.1 percent in
April. Retail and wholesale activity as well as information and communication services led the metric
higher. The outlook going forward seems uncertain however with some of the government’s stimulus
programs expire this year while a new program offering each family a monthly allowance of 13,000 yen is
phased in. On balance, April’s labor market figures hinted firms are becoming reluctant about future
demand amid fears of a slowdown in China – the core engine of demand driving Japan’s export-led
recovery – hinting that lackluster hiring will weigh on consumer spending (including that on services) in
the months ahead. 

TRADING STRATEGY :Buy 90.8500 for short term.

U.S. DOLLAR VS. SWISS FRANC

Resistance : 1.1337/42, 1.1390/95 Daily Trend : SIDE/DOWN

Support : 1.1235/40 , 1.1200/05 Weekly Trend : SIDE/UP
A clearly defined yearly high has been established just over 1.1700 and the market is now in the process
of correcting in search of a fresh higher low before bullish continuation. Look for setbacks to now extend
towards former resistance now turned support in the 1.1200-1.1250 area, from where a resumption of
buying is to be expected in favor of the next major upside extension towards 1.2000. 

TRADING STRATEGY :Buy @ 1.1245 for short term.

Currency Forecast
 
Daily technical outlook

U.S. DOLLAR VS. INDIAN RUPEE

 Resistance : 46.72/74, 46.84/85 Daily Trend : SIDE/UP
Support : 46.48/50 , 46.40/41 Weekly Trend : SIDE/UP
The Indian rupee rose on Thursday, boosted by a return in risk taking globally that also pushed up local
stocks. The dollar's losses against major currencies also helped. The Indian Rupee was traded in a range
of 46.4800-46.6400 per dollar. The broad rally in global equities is helping the rupee as well. The euro's
moves will be closely watched for direction. Most Asian stock markets jumped, following gains on Wall
Street after strong housing figures and a recovery in energy stocks. 

TRADING STRATEGY :Buy @ 46.5000 for short Term.

EURO VS. U.S. DOLLAR

Resistance : 1.2345/50, 1.2385/90 Daily Trend : SIDE/DOWN

Support : 1.2220/25 , 1.2155/60 Weekly Trend : SIDE/UP
No news is not good news for the euro. Already under considerable strain by a market that is skeptical
over the region’s ability to avoid a double dip recession, financial crisis and even a possible fragmentation
of the relatively new monetary union; investors need some sort of promise to reinvest their capital in the
unbalanced economy. Making matters worse Wednesday, news that Iran is looking to unload 45 billion
euros from its reserves further diminishes the single currency’s ability to elicit confidence. Just a short-
time ago, China was taken to task to refute rumors that it was considering diversifying away from
European assets. And, while Iran is not the investor that China is, the continued speculation and fear that
long-term and deep-pocketed investors are starting to give up on the euro further wears on the
speculative crowd that is only concerned about short-term gain and loss. At the root of the problem, the
financial uncertainties for the economy continued today. Attempting to fill its budget deficit, Greece
announced plans to sell off its stakes in railway and water companies as well as the post office. This
collective unloading is expected to pull in 3 billion euros. Less promising, Spain’s consumer confidence
report was released with the biggest monthly drop on record following civil wage cuts and a freeze on
pensions. With approximately 38 billion in debt coming due next month, Spain is being watched. 

TRADING STRATEGY :Sell @ 1.2355 for medium Term.

BRITISH POUND VS. U.S. DOLLAR

Resistance : 1.4750/55, 1.4800/05 Daily Trend : SIDE/UP

Support : 1.4635/40 , 1.4585/90 Weekly Trend : SIDE/UP
Another currency that is fundamentally depressed and should have theoretically appreciated with a boost
in underlying risk, the British pound was otherwise preoccupied by the Bank of England’s annual report.
For any bulls that were banking on the MPC following the OECD’s advice and moving sooner rather than
later on tightening monetary policy, the statement tempered rate speculation by suggesting the economy
would struggle to meet the bank’s 2 percent inflation target over the medium term. With commentary like
this, official are clearly unconvinced of the permanence of the recent 3.7 percent CPI reading. Adding to
this disappointment, net consumer credit slipped 0.1 billion pounds in April. 

TRADING STRATEGY :Sell @ 1.4750 for short term.

U.S. DOLLAR VS. JAPANESE YEN

Resistance : 92.00/05, 92.48/53 Daily Trend : SIDE/UP

 Support : 92.10/15 , 91.72/77 Weekly Trend : SIDE/UP
As if things could not get any worse in the outlook for Japan and its currency; we have added political
trouble to growth and financial concerns. No doubt, Prime Minister Hatoyama’s resignation is a strategic
move to prevent the party from losing too many seats in Parliament two months down the line; but when it
becomes clear no leader can fix Japan’s problems, the currency will be in real trouble. 

TRADING STRATEGY :Sell @ 92.9500 for short term.

U.S. DOLLAR VS. SWISS FRANC

Resistance : 1.1565/70, 1.1605/10 Daily Trend : SIDE/DOWN

Support : 1.1455/60 , 1.1400/05 Weekly Trend : SIDE/UP
The overall outlook remains highly constructive and while daily studies do not rule out the possibility for
some form a pullback to allow for technicals to unwind, any setbacks should be very well supported
ahead of 1.1200, in favor of an eventual push towards 1.2000. In the interim, short-term support comes in
by 1.1430 and a break and close below will be required to trigger the onset of a short-term corrective
pullback.

TRADING STRATEGY :Buy @ 1.1485 for short term.