Evening Report-Jan 30.

Rupee closed at 48.87 as stock market recovered from early lows. The U.S. GDP figures due it today are expected to show that the economy contracted by 5.5% in the 4Q, which would be the most since 1982. A deeper than expected contraction will add to the current sentiment that the U.S. economy may not see growth until 2010.The dismal durable goods orders and unemployment figures yesterday have sparked yet another bout of risk aversion and confirmation of a deepening recession may add to that sentiment. However a better than expected print may lead to a risk reversal and dollar weakness. Additionally since the growth numbers are backward looking traders may not put as much stock in them as the expectations that the forthcoming stimulus plan will lead to growth . Euro extended its losses falling to as low as 1.2833 as the single currency would lose ground against the dollar as risk aversion picked up due to weaker than expected U.S. data. European fundamentals added to the bearish sentiment as unemployment rose for a fifth straight month to 8.0% from 7.9% in November. Meanwhile, the CPI estimate fell well below expectations of 1.4% printing at 1.1%, as inflation remains below the ECB 2% target. The MPC’s price stability mandate may force their hand as falling inflation increases the risk of deflation in the region. President Trichet has consistently maintained that deflation isn’t a concern as he expects prices rise in the second half of the year. However a pick up in risk appetite could spark bullish sentiment as the single currency currently has the third highest yield among the majors. British pound continues to find support despite expectations that the BoE will cut its benchmark rate by 50 bps next week. The central bank now has the ability to employ quantitative easing and can now purchase bonds and commercial paper in an effort to improve credit conditions. Today we saw that there has been a slight increase in credit as mortgage approvals rose to 31,000 from 27,000 in December. Despite the improvement conditions remain tight and with the GFK consumer confidence reading falling to –37 from –35-the lowest since July- the U.K. economy may continue to contract. Therefore, we may see the pound weaken, as we get closer to the rate decision, a key level to watch is the 20-day SMA at 1,4984. Another failed attempt to break above the technical level could lead to a sharp reversal. Yen Strengthens On Risk Aversion Flows.

Japanese Yen strengthened -jan 30.

Japanese Yen strengthened as stocks slumped throughout the world. December Retail Sales dropped -2.7% . DECEMBER INDUSTRIAL OUT -9.6%.
Technical Outlook:
YEN R1: 90.40 S1:88.80
R2: 90.50 S2:88.70
yen chart pattern indicates the currency to remain sideways to bullish for the day. Trading range for the day is expected between 88.86–90.20 levels . Stochastic and momentum are seen trending down pointing a small downward correction but parabolic is supporting the bullish outlook.

Euro drifted downbut sterling performed better-jan 30.

Euro a slew of economic data pointed to a continued depressed economy with record lows sentiment readings and German Unemployment jumping 56K in December. Also weighing was an article by George Soros questioning the survivability of the EURO during the economic crisis unless a global bad bank was created. Looking ahead for Euro zone Inflation forecast at 1.4% in January and the December Unemployment rate is forecast to rise to 7.9% from 7.8% previously . Sterling was one of the better performing currencies shrugging off GBP/JPY selling to gain against the USD and EUR as the market covered shorts and the Pound rally continued. . Looking Ahead for December Consumer Credit seen at 0.7b vs. 0.75b previously

Technical Outlook:

EURO R1: 1.3040 S1:1.2810
R2: 1.3060 S2:1.2780
chart pattern shows a bearish movement . Trading range for the day is expected between 1.2820-1.3020 levels for the day. Momentum and stochastic are seen trending down giving bearish outlook. Currency is trading below the moving average giving bearish outlook.

GBP R1: 1.4340 S1: 1. 4030
R2: 1.4360 S2: 1. 4020
chart pattern gives a bearish outlook. Trading range is expected between 1.4080-1.4320 levels for the day. Currency is trading on the moving average and Momentum and stochastic are seen trending down giving bearish outlook.

Rupee depreciated on concerns over fund outflows -jan 30.

Rupee depreciated against the US currency on increased dollar demand by banks and concerns over fund outflows from the weak domestic equity markets in tandem with falling Asian bourses. U.S. Dollar gained on fresh risk aversion as bad economic data and profit taking sent world equities lower. US data was weak with Durable goods in December falling 2.6% vs. 2% forecast. Also released December home sales which fell to a record low of 333K. Looking ahead for Q4 preliminary GDP is forecast at -5.4% vs. -0.5% in Q3. Also released, Final January Michigan Consumer Confidence forecast 61.9 vs. 60.1 previously.

Tech Outlook

USDINR chart pattern gives mixed signals and currency is expected to trade in the range of 48.98-49.23 levels for the day. With good support seen at 48.83 levels .key resistance is seen at 49.35 levels. Stochastic is seen trending up giving bullish crossovers and the currency is seen trading above the moving average.

Evening Report-Jan 29.

The Rupee closed at 49.02 due to month-end dollar demand from importers .Currency moved in a thin band in the early trade as banks mopped up dollar inflows from exporters. Banks have been continuously buying dollars noting its strength globally. In U.S. news Fed signaled that it’s moving closer to buying long-term Treasuries and expanding its $600 billion program to buy home-finance debt. Chairman Bernanke would also warn of that the global economy is at risk of deflation and that their prediction of gradually growth at the end of the year is at risk. The dour comments fueled demand for U.S. Treasury’s, which has been a supportive factor for the dollar. The comments dampened optimism that was generated by the prospect of the creation of a “bad bank” by the U.S. government to remove toxic assets from banks balance sheets. Today’s economic calendar may add to risk aversion as December U.S. durable goods orders are expected to have fallen by 2.0% as consumers and businesses have continued to retrench in the face of a deepening recession. Initial jobless claims are expected to be above 500,000 for another week adding to the dimming hopes for domestic growth. Euro dropped below 1.3050 as German unemployment rose by nearly twice as much as the 30,000 forecasted. The German economy saw another 56,000 added to the unemployment rolls, which led to the unemployment rate rising 7.8%. The fundamental story for the country would grow dimmer as retail PMI fell to 41.7 from 42.3. However, the indicator for the Euro-Zone surprising showed an improvement to 44.0 from 41.4 led by gains in France. The rest of the data for the economic region wasn’t as bullish with sentiment reading deteriorating or remaining flat led by economic confidence falling to a record low of 68.9. Euro was also weighed by a CNN report that ECB President Trichet stated that he hasn’t excluded a move below 2%, which lowered expectations that the central bank will pause at its next policy meeting. Despite the report is more likely that the MPC will refrain from further easing as they try and assess the impact of past actions and maintain their measured approach. British pound fell below 1.4100 before it bounced from support back above 1.4200. Risk aversion flows had weighed on the sterling temporarily stalling its recent bullish momentum. The pound rallied over 900 pips after hitting a 23 year low and appears poised to add to its gins after shaking off recent bearish sentiment. U.K. stocks have come off their session low which is adding support. We may see risk appetite return by the end of the day if markets start to focus more on the impact of the measures to stabilize the banking system and the prospect of future rather than the current global downturn. yen and the dollar rose after the Federal Reserve declined to provide more information about buying Treasuries to help boost the economy, fueling speculation investors will favor the currencies as a refuge.

Aussie falls ahead of rate cut-jan 29.

Australian Dollar tracked the Euro higher in a move that has recently seen the AUD dubbed the ‘fast Euro’. Selling interest above 0.6700 proved strong headwind the pair slumped back to low 0.66 after the FOMC statement. With R1: 0. 6700 and R2: 0.6710 ,S1:0.6510 and S2: 0.6500
Chart pattern signals bearish note for the day .Trading range is expected between 0.6520-0.6680 levels Stochastic and momentum are seen trending down giving bearish signals .Currency is trading on the moving average but parabolic is giving a caution as it is supporting small bullish correction.

Japanese Yen was sold across the board -jan 29.

Japanese Yen was sold across the board as risk sentiment improved and the market bought up high yielding currencies. USD/JPY jumped above 90 as Equities rallied into the US session and extended gains after the FOMC minutes. Japan Retail Sales dropped -2.7% vs. -1.6% forecast.

Tech outlook:

YEN R1: 90.60 S1:89.10
R2: 90.80 S2:88.90
yen chart pattern indicates the currency to remain sideways to bullish for the day. Trading range for the day is expected between 89.20–90.50 levels . Stochastic and momentum are seen trending down pointing a small downward correction but parabolic is supporting the bullish outlook.

Euro and pound on profitbooking-jan 29.

Euro retested the 1.33 key level but was rejected quite violently as the FOMC statement helped the USD. Weighing intra day was weaker than expected German CPI in January at -0.5% vs. -0.3% forecast. Looking ahead for German Unemployment is forecast at 7.7% . Euro zone December Private loans is forecast at 6.5% . Sterling pushed higher after tripping stops above 1.4250. The market was very bullish and tested supply at 1.4350 that held until the late USD forced some profit taking. Looking Ahead for January House Prices are forecast to fall -1.7% , expecting a -16.7% Y/Y drop.

Technical Outlook:

EURO R1: 1.3300 S1:1.3040
R2: 1.3320 S2:1.3020
chart pattern shows a sideways movement . Trading range for the day is expected between 1.3060-1.3280 levels for the day. Momentum and stochastic are seen trending up giving bullish outlook. Currency is trading between the fast and slow moving average giving bullish crossovers.

GBP R1: 1.4340 S1: 1. 4030
R2: 1.4360 S2: 1. 4020
chart pattern shows shows a sideways movement. Trading range is expected between 1.4050-1.4320 levels for the day. Currency is trading above the moving average but Momentum and stochastic are seen flat keeping silent on the trend.

Rupee traded sideways amid lack of cues-jan 29.

Rupee was little changed against the U.S. dollar as traders kept away from taking major positions amid mixed cues .A few banks sold the dollar on hope that rise in local share market may spur inflows from foreign funds. Firm global shares globally raised expectations that the rupee may gain, but dollar demand from some banks noting its rise globally limited the rise. U.S. Dollar was sold most the day as equities around the world rallied on news that the Obama Administration would be looking to create a bad bank to hold toxic assets. The losses were reversed after guidance from the FOMC that buying of US treasuries from the FED was not a sure thing. Looking ahead for December Durable Goods are expected to drop -2% vs. -1.5% previously. Also released, December New Homes Sales are forecast at 0.4m vs. .407m previously.

Technical Outlook:

USDINR chart pattern gives mixed signals and currency is expected to trade in the range of 48.72-49.02 levels for the day. With good support seen at 48.68 levels .key resistance is seen at 49.10 levels. Stochastic is seen trending down waiting for crossovers and the currency is seen trading below the moving average.

Australian Dollar rallied -jan 28.

Australian Dollar rallied in Europe dragged up with the Euro to test 0.6700 but couldn’t sustain elevated levels as metals led by Oil fell heavily in the US session. On the data front December Business Confidence was -20 vs. -30 previously and Q4 PPI 1.3% vs. 20% previously

Technical Outlook:
AUD R1: 0. 6750 S1:0.6550
R2: 0.6780 S2: 0.6530
Chart pattern signals bullish note for the day .Trading range is expected between 0.6580-0.6740 levels Stochastic and momentum are seen trending up giving bullish signals .Currency is also trading above the moving average but parabolic is giving a caution signal.

Japanese Yen was weaker-Jan28.

Japanese Yen was weaker against most currencies today as the Nikkei surged 5% on the back on a new corporate debt plan from the Japanese government.

Technical Outlook:

R1: 90.00 S1:88.80
R2: 90.20 S2:88.60
yen chart pattern indicates the currency to remain sideways to bullish for the day. Trading range for the day is expected between 88.90 – 89.90 levels . Stochastic and momentum are seen trending up pointing a small upward correction ,parabolic is also supporting the bullish outlook.

Euro extends its bull rally but pound consolidates-jan 28.

Euro continued its recent rally although trading was volatile as German data beat expectations. German IFO in January jumped to 83 vs. 81.3 previously. The market tested 1.3300 on the back of this but pulled back as profit taking emerged. Looking ahead for February German GFK consumer confidence is expected at 2 vs. 2.1 previously. Sterling consolidated the 5 big figure gains from Monday before pushing on in Europe as the market ceased the relentless pressure on the pound. January CBI distributive trades beat forecasts of -49 coming at -53

Technical Outlook:
EURO R1: 1.3390 S1:1.3130
R2: 1.3420 S2:1.3110
chart pattern hints towards a bull note . Trading range for the day is expected between 1.3150-1.3380 levels for the day. Momentum and stochastic are seen trending up giving bullish outlook. Currency is trading above the moving average giving bullish crossovers.

GBP R1: 1.4400 S1: 1. 4130
R2: 1.4420 S2: 1. 4120
chart pattern shows a bull trend for the day. Trading range is expected between 1.4140-1.4390 levels for the day. Currency is trading above the moving average Momentum and stochastic are seen trending up supporting the bullish outlook

Rupee strong on expectation of inflows-jan 28.

Rupee rose against the dollar as the market rally lifted expectations of capital inflows. Liquidity was comfortable with banks parking close to Rs 52,000 crore with RBI. The central bank refrained from cutting rates at a policy review so as to assess the impact of its recent aggressive easing. U.S. Dollar was generally weak as the majors continued their recovery off multi-week lows. US data was weak with consumer confidence falling to a new low of 37.7 in January. The Richmond Fed rose slightly to -49 from -55 previously but is still at very poor levels. Oil fell over 6% on softening demand concerns. Crude Oil closed down -$3.63 ending the New York session at $42.10 per barrel .Looking ahead for FOMC Meeting widely expected to remain at 0% but the market will be waiting for the statement on any new initiative.

Tech Outlook:

USDINR chart pattern gives bearish signals and currency is expected to trade in the range of 48.68-48.98 levels for the day. With good support seen at 48.64 levels . key resistance is seen at 49.05 levels. Stochastic is seen trending down and the currency is seen trading below the moving average.

Evening Report-Jan 27.

Indian Rupee trimmed its rise and ends at 49.93 levels for the day after the Reserve Bank of India retained its key interest rates and cash reserve ratio at its monetary policy to leave headroom for further rate cuts.The lack of tier-one data could leave the U.S. dollar at the mercy of risk trends however, a considerable improvement in consumer confidence could spur volatility for the greenback. Meanwhile as market participants expect the Richmond Fed manufacturing index to increase to -49 from -55, a rise in production could help to brighten the outlook for the world’s largest economy, but as the S&P/Case-Shiller home price index is expected to fall further, the dire state of the housing market could overshadow an improved outlook for production. Euro surged to a high of 1.331 following a rebound in the German IFO survey but the intra day rally was short lived as the current account deficit widened to 16.0B from a revised reading of 6.0B in October. Fading demands from the global economy has certainly dragged on economic activity and the outlook for growth remains bleak as the European Commission forecast the annual rate of growth to contract 1.9% this year. Nevertheless a separate report showed that import prices in Germany dropped another 4.0% in December after falling 3.4% in the previous month, which lowered the annual rate to -5.1% from -1.3%. Meanwhile, the current account deficit for the Euro-region more than doubled as demands from abroad weakened further, and the disappointing trade figures continues to reflect a dour outlook for the Euro-Zone, which could lead the European Central Bank to continue its easing cycle over the coming months in order to avoid a deepening recession. British pound reached a high of 1.4242 as the U.S. dollar weakened across the board, and may continue to retrace the sell off from the previous week as investors increase their appetite for risk. Meanwhile the U.K. CBI retail sales survey showed a minor improvement in demands as the index increased to -47 , Despite the improvement in sales, the outlook for spending in February hit a record low as the economy faces its worse recession in over a decade. As the U.K. economic calendar remains fairly light for the remainder of the week, risk sentiment is likely to dictate price action for the Sterling and its currency crosses. yen fell as the Japanese government planned to inject capital into ailing companies prompting some investors to take on riskier trades. currency fell as a rally in stock prices revived investors' risk appetite.

AUD on uptrend

Australian Dollar caught the uptrend breaking back above 0.6600 but the market was less keen than usual to test higher levels as the outlook for the Australian economy remained uncertain and the expectations of rate cute loom. December Business Confidence -20 vs. -30 previously and Q4 PPI 1.3% vs. 20% previously.

Technical view :
AUD R1: 0. 6730 S1:0.6530
R2: 0.6750 S2: 0.6520
Chart pattern signals bullish note for the day .Trading range is expected between 0.6540-0.6720 levels Stochastic and momentum are seen trending up giving bullish signals .Currency is also trading above the moving average.

Sterling staged a major recovery

Sterling staged a major recovery on the back of the Barclays earning which combined with a rally in stocks and commodities to push the pound from 1.35 to 1.40. Looking ahead for January CBI distributive traders forecast at -53 vs. -55 previously.
Technical view
GBP R1: 1.4030 S1: 1. 3750
R2: 1.4050 S2: 1. 3740
chart pattern shows a bull trend for the day. Trading range is expected between 1.3920-1.4150 levels for the day. Currency is trading above the moving average and Momentum and stochastic are seen trending up giving bullish outlook

Yen made gains

Yen most of the crosses made substantial gains as majors rallied and risk appetite improved. Looking ahead for Bank of Japan minutes are released.

Technical view
YEN R1: 90.40 S1:88.60
R2: 90.50 S2:88.40
yen chart pattern indicates the currency to remain bullish for the day. Trading range for the day is expected between 88.70 – 90.30 levels . Stochastic and momentum are seen trending up pointing a small upward correction

Euro surged

Euro surged after Europeans stocks rallied off lows from last week and the market continued to support commodities. EUR/JPY was a major mover up over 4 big figures. Resistance at 1.3000 gave way and the Euro popped to 1.3200. Looking ahead for German January IFO is expected 81.3 vs. 82.6 previously. Current Account is forecast at -8bn vs. -6.4bn previously.

Technical view
EURO R1: 1.3290 S1:1.3110
R2: 1.3320 S2:1.3100
chart pattern hints towards a bull note . Trading range for the day is expected between 1.3120-1.3280 levels for the day. Momentum and stochastic are seen trending up giving bullish outlook.

Evening Report-Jan 22

Rupee closed at 49.16/18 after giving up gains against the U.S. dollar as some banks covered short dollar positions and the stock market eased off from an early rally.Dollar demand from importers added to the downward pressure on the Indian unit.U.S. economic calendar will present event risk for the first time this week with housing start and jobless claims on tap. New construction is expected to have fallen to a new all time low of 605,000 from 625,000 in November. The continued deterioration of the housing market has beget the second round of banking woes and has forced the U.S. government to consider a comprehensive package for the sector. The promised action would spark risk aversion leading equity markets higher which would sink the dollar as traders sold off U.S. Treasuries. However, if jobless claims print above 500,000 as expected, it may remind traders of the economy’s current weakness and could weigh in sentiment and add dollar support. Euro would climb as high as 1.3076 before a industrial new orders record low print. Demand fell 26.2% on an annualized basis on the back of a 4.5^% decline over the month. Meanwhile French consumer spending fell 0.9% in December which was more than the -0.2% that was expected as rising unemployment has curbed domestic demand. The fundamental picture for the economic region continues to deteriorate which has increased expectations that the ECB will need to continue their current easing policy. As companies face declining demand and a lack of funding they have been forced to postpone new projects which will weigh in future growth and continue to drag on the regions economy. Despite the dimming prospects, the central bank signaled that they will most likely pause easing at their next policy meeting with a possible rate reduction in March. Pound has soared since falling to the lowest level against the dollar and a record low versus the Yen. After falling to as low as 1.3620 the Sterling shot up to test 1.4000 before finding resistance as typical retracement was fueled by the increase in risk appetite. The CBI manufacturing survey fell to -48 from -35 as new orders dropped 13 points. The expectations for further weakness in the sector have weighed the pound down to 1.3800. JPY rose to a record high against a basket of currencies as investors started speculating about global banking woes

Japanese Yen had tremendous movement -jan22

Japanese Yen had tremendous movement yesterday after massive options expired and US Stocks opened weak. A sharp reversal in US stocks and profit taking sent most crosses rocketing back to initial levels. Looking ahead for BOJ meet today to discuss rates and are expected to hold at 0.1%.December Trade Balance -320 Bn Yen.

Tech outlook:
YEN R1: 90.00 S1:88.60
R2: 90.10 S2:88.40
yen chart pattern indicates the currency to remain bullish for the day. Trading range for the day is expected between 88.70 - 89.90 levels . Stochastic is trending up pointing a small upward correction

Euro and pound ranged as market consolidated -jan 22.

Euro ranged from 1.28 to 1.300 as the market consolidated recent weakness. EUR/GBP traded above 0.9400 as Pound weakness intensified. The rally in Oil and US stocks let the EURO finish the day on the front foot. German PPI fell 1% in December. Looking ahead for November Industrial Orders are forecast to fall -4.8% vs. -4.7% previously. Sterling after testing the 1.4000 level in an Asian recovery, weak UK data sent the Pound to new 8 year lows under 1.3700. The December Claimant Count dropped to 77.9K from a revised 83.1K previously. Looking ahead for January CBI orders are forecast at -39 vs. -35 previously.

Technical Outlook:

EURO R1: 1.3120 S1:1.2800
R2: 1.3130 S2:1.2780
chart pattern hints towards a bear note . Trading range for the day is expected between 1.2820-1.3100 levels for the day. Momentum and stochastic are seen trending down giving clues for the bearish correction.

GBP R1: 1.4030 S1: 1. 3750
R2: 1.4050 S2: 1. 3740
chart pattern shows a mixed trend for the day. Trading range is expected between 1.3770-1.4020 levels for the day. Currency is trading below the moving average but stochastic is seen trending up giving a mixed outlook.

Indian Rupee appreciated against the US currency

Indian Rupee appreciated against the US currency in early trade on dollar selling by banks and exporters amid hopes of firm opening on the domestic stock markets in line with better trends on other Asian bourses U.S. Dollar had a volatile trading day with the market testing the previous day’s highs but spent most of the day consolidating gains. Shares rallied hard into the close and this helped the Dollar to gain against the Yen. The January NAHB Housing Market Index dropped to 8 vs. 9 expected in January. The market focused on the upcoming confirmation hearing with anticipation of quick implementation of Obama’s stimulus plan. Looking ahead for December Housing starts are forecast at 0.61M and Weekly Jobless Claims are forecast at 540K.

Technical Outlook:

USDINR chart pattern gives mixed signals and currency is expected to trade in the range of 48.71-49.10 levels for the day. With good support seen at 48.64 levels . key resistance is seen at 49.15 levels. Stochastic is seen trending down and the currency is seen trading on the moving average only break on either sides can confirm the trend.

Evening Report-jan 21.

The Rupee traded weaker as a drop in shares continued to fuel concerns about foreign fund withdrawls but the dollar's decline overseas helped prevent sharp losses. The dearth of fundamental releases on the U.S. calendar continues today with only the NAHB housing market index scheduled. The second tier indicator is expected to show a level reading of 9, which may be a signal that the housing sector has started to stabilize. However giving the mounting troubles of the banking system, credit conditions may start to tighten again which will make it formidable for buyers to secure funding. The lack of demand may push battered home values even lower which will only add to the woes of the economy. Therefore President Obama’s economic team is fast at work to develop a bank bailout package that will be implemented along side the already proposed fiscal stimulus plan. The call for action may help ease market fears and spark risk appetite which could lead to dollar weakness. Euro fell back to support at 1.2850 before another move higher. Risk aversion flows had the single currency on the run before Hawkish comments from ECB President Trichet and other committee members fueled support. The MPC leader would reaffirm his contention that the region was not at risk for deflation and that it should be disciplined and maintain its medium term perspective. The comments would reinforce earlier ones by committee member Nowotny that there are no plans for a zero interest rate policy. Pound dropped after climbing back above 1.4000, but failed to hold the level ahead of the BoE’s minutes and employment data as traders started to price in further rate cuts and quantitative easing from the central bank. The Sterling would fall to as low as 1.3715 after BoE Governor King in a speech in Nottingham stated that officials may need to start buying assets in the next few weeks to promote lending. Meanwhile the minutes from the MPC’s last meeting showed an 8-1 voted to lower the benchmark rate by 50 bps, as perennial dove David Blanch flower called for a full %1 reduction. The tight credit markets continue to impact the economy which was evident in the employment report which showed jobless claims of 77,900. The troubles of the banking system may ultimately force the government to nationalize banks and start buying corporate bonds and commercial paper to improve lending to businesses and consumers. Despite inflation remaining above the central bank’s 3% threshold, Governor King still sees the risk of it falling below the 2% target which would justify lower interest rates and quantitative easing. yen strengthened to 89.61 levels

Australian Dollar succumbed to USD strength-Jan 21.

Australian Dollar succumbed to USD strength although held up better than others as Oil and Gold showed some buoyancy. Aussie has R1: 0. 6650,R2: 0.6680 as resistance levels and S1:0.6450 S2: 0.6440 as support levels.Chart pattern signals bull note for the day .Trading range is expected between 0.6460-0.6640 levels Stochastic and momentum are seen trending up giving bullish signals but caution required as the Currency is also seen trading below the moving average.

Rupee dropped to more than one-month low-jan 21.

Rupee dropped to more than one-month lows on concerns of capital outflows from the local share market following weak Asian stock markets and the dollar's strength against some.USDINR chart pattern gives bearish signals and currency is expected to trade in the range of 49.02-49.40 levels for the day. With good support seen at 48.95 levels . key resistance is seen at 49.48 levels. Stochastic is seen trending down but the currency is seen trading above the moving average giving mixed to bearish signals.

Yen was the biggest gainer-jan 21.

Yen was the biggest gainer surpassing the USD as the major recipient of safe haven flows. Japanese Consumer Confidence hit 26.

Technical Outlook:
R1: 90.80 S1:89.30
R2: 91.10 S2:89.20
yen chart pattern indicates the currency to remain on a bull note for the day. Trading range for the day is expected between 89.40 - 90.60 levels . Stochastic is trending up hinting towards a bullish correction and the currency is seen trading on the moving averages giving bullish crossovers .

Euro and pound came under pressure-jan 21.

Euro came under pressure as the key 1.3000 level gave way in Asia and the heavy stocks saw the pair dip in 1.28’s. EUR/JPY dropped hard falling to 115 as risk aversion surged higher. EUR/GBP jumped higher as the Pound continued to plummet. January German ZEW Survey showed a bounce to -31 vs. -43.5% expected as recent rate cuts improved the business outlook. Looking ahead for German PPI is expected to drop -1.2% in December. ECB President Trichet also speaks today. Sterling near capitulated coming under heavy selling pressure all day as the market continued to factor in a deteriorating UK banking sector. December CPI lost -0.4% vs. -0.8% forecast. Looking ahead for December Claimant Count with a forecast at 85k vs. 75.7k. The November ILO Unemployment rate is forecast 6.1%.·
Technical Outlook:
Euro
R1: 1.3120 S1:1.2840
R2: 1.3140 S2:1.2830
chart pattern hints a mixed note for the day wih the Trading range expected between 1.2850-1.3100 levels for the day. Momentum and stochastic are seen is seen flat but at the oversold territory giving clues for the possibility of an upward correction .
Pound
R1: 1.4180 S1: 1. 3800
R2: 1.4220 S2: 1. 3780
chart pattern hints towards a mixed trend but the possibility of slight upward correction cannot be ruled out as the chart forms a small reversal pattern .Trading range is expected between 1.3810-1.4170 levels for the day. Currency is trading below the moving average and stochastic is also seen trending up after forming a head and shoulder pattern showing slight upward correction.

Evening Report-Jan 20.

The Rupee has slid to a new multi-week low to the dollar and closed at 49.20 levels on the back of greenback gaining ground against the Asian currencies and stocks losing way .Empty U.S. economic calendar will leave dollar price action at the mercy of risk winds. More banking troubles have ushered in another round of risk aversion which has benefited the dollar. U.S. markets were closed yesterday and we could see traders start to price in the impact of the U.K. bailout plan and RBS’s troubles. Additionally, the U.S. presidential inauguration could have an impact on price action, which is historically a down day for equity markets. However the major event risk during the U.S. session will come from the BoC rate decision. The MPC is expected to lower their benchmark rate by 50 bps which could add to recent “loonie” weakness. Euro fell below 1.300 for the first time in a month on the back of increasing risk aversion, before a better than expected German ZEW print lent support. Indeed, confidence among German investors increased form -45.2 to -31.0, which was the first improvement in four months. The ECB’s willingness to continue cutting interest rates and the announcement of a German fiscal stimulus package has raised optimism .Pound has remained under pressure since yesterday’s announcement of a £100 billion bank bailout, as it increased concerns that the global financial crisis isn’t over and the country’s recession will deepen. The Sterling fell below 1.400 reaching as low as 1.3936, despite a stronger than expected CPI report. Indeed, inflation in the U.K. slowed to 3.1% from 4.1% in November, which was significantly above estimates of 2.6%. Prices remain above the BoE’s 3% threshold which may give the central bank a reason to pause their easing policy despite the ongoing contraction in the economy. As expected falling oil prices dragged energy costs and retailers slashing prices to lure customers during the Holidays led to a 4.1% drop in apparel prices. However, despite food prices increasing by 0.6% , core prices fell to 1.1% which was below estimates of 1.3% and down from 2.0% the month prior. The announcement of RBS that the bank experienced the biggest corporate loss in British history has raised expectations that the bank will become nationalized. The ongoing troubles of the financial sector and the deepening recession are expected to lead to a ZIRP and quantitative easing from the BoE. There has also been talk of a possible downgrade of the country’s debt if the banking losses continued. Yen climbed against the dollar as the currency is seen as a safe-haven in times of economic uncertainty. Japanese household consumer sentiment deteriorated as economic downturn hit consumers' assessment on employment

Japanese Yen gained on risk aversion

Japanese Yen gained strength after risk aversion soared in Europe on back of the fresh banking concerns. USD/JPY was under pressure as well but broad USD strength helped the pair to stay above the key 90 level. November Industrial Production was revised lower at -8.5% vs. -8.1%. Looking ahead for Consumer Confidence for December previously at 28.4.
Technical outlook:
R1: 91.00 S1:89.60
R2: 91.10 S2:89.40
yen chart pattern indicates the currency to remain mixed for the day. Trading range for the day is expected between 89.70 - 90.95 levels . Stochastic is trending down pointing a small downward correction and the currency is seen trading between the moving averages giving mixed signals.

Australian Dollar traded lower-jan20

Australian Dollar traded lower as the USD strengthened and risk aversion pushed the AUD lower.R1: 0. 6680 ,R2: 0.6690,S1:0.6450, S2: 0.6440.Chart pattern signals bear note for the day .Trading range is expected between 0.6490-0.6670 levels Stochastic and momentum are seen trending down giving bearish signals .Currency is also seen trading below the moving average.

Rupee weakened following weak Asian stock markets

Rupee weakened following weak Asian stock markets and the dollar's rise against some regional currencies, but sharp losses may be limited as exporters cash in their dollars. U U.S. Dollar enjoyed major gains against the EURO and GBP as bad news out of Europe hurt their respective currencies. European stocks were also hurt by the negative news but follow on effects in the US Session were avoided as the Markets were closed for Martin Luther King Day

Technical outlook:
USDINR chart pattern gives bullish signals and currency is expected to trade in the range of 48.85-49.13 levels for the day. With good support seen at 48.78 levels . key resistance is seen at 49.23 levels. Stochastic is seen trending up and the currency is seen trading above the moving average and is supporting the bull run.

Euro and pound fell against the dollar on Bailout Plan

Euro enjoyed buoyancy in early Asia before news of the S&P downgrade of Spain’s credit rating and European banking stocks tanked. Also Hurting sentiment was the European Commission slashing growth forecasts for 2009 to -1.9% from -0.1%. Looking ahead for German Zew Survey is forecast at -44 vs. -45.2 in January. Sterling was the worst performing currency as Royal Bank of Scotland forecast losses of 28 Bn pounds, the largest in UK corporate history. Shares of RBS fell 67% and pressured other banks stocks lower on fear of nationalization. Looking ahead for December CPI is forecast at -0.8% vs. -0.1% m/m previously.
Technical outlook:
EURO R1: 1.3160 S1:1.2900
R2: 1.3180 S2:1.2880
chart pattern hints towards a volatile move . Trading range for the day is expected between 1.2920-1.3150 levels for the day. Momentum is seen flat and stochastic is seen at the oversold territory giving clues for the possibility of an upward correction after taking the lower range support.

GBP R1: 1.4380 S1: 1. 3950
R2: 1.4420 S2: 1. 3940
chart pattern shows the currency to remain on a bearish note for the day. Trading range is expected between 1.3970-1.4350 levels for the day. Currency is trading below the moving average and stochastic is also seen trending down forming a head and shoulder pattern showing further downside.

Evening Report-Jan 19.

. The Rupee trimmed gains and closed at 48.64 after testing a high of 48.71 levels due to dollar demand from importers, and swaying stocks failed to provide cues on the direction of fund flows but the dollar's weakness overseas helped market sentiment especially demand for the greenback emerged after banks bought the greenback noting that the fall in sterling .The U.S. trading session will be quiet with markets closed for the MLK holiday. Therefore a lack of event risk will leave price action at the mercy of broader economic factors. The dollar may continue to benefit from safe haven flows as markets remain weary after last week saw the Bank of America go back to the government for additional aide and Citigroup announce the end of the business model as they try to survive. We may also see some positive green back flows due to the U.S. presidential inauguration as the new administration is expected to usher in a fiscal stimulus package in excess of $750 billion. The President Elects economic advisors have already announced that the remainder of the TARP funds will be focused on promoting credit to consumer s and businesses.Euro sold off ahead of the news falling to a low of 1.3245 as investors were expecting the dour forecast. Meanwhile the construction activity in the region dropped by1.1% in November which was the lowest in eight months confirming the expected impact of tight credit markets. The Euro could start to become range bound as the ECB signaled that it will forgo further action until its March meeting, where further easing is most likely. European Commission is forecasting a contraction of 1.9% reversing November’s prediction of 0.1% growth as tight credit markets and shrinking global demand weighs on its economies.Pound dropped over 200 bps as the British government announced that it would empower the BoE to buy toxic assets in an effort to promote lending. After a reaching as high as 1.4897 the Sterling would fall back to 1.4627 before finding support. The January Rightmove housing report showing a 1.9% drop in house prices started the pound’s sell off as further deterioration in the sector continues to add strain to the banking system. U.K. Prime Minister Gordon Brown announced today that the government would increase its role in the financial system by using the BoE’s balance sheet to buy at least £100 billion in troubled assets. The Prime Minister stated that this was not a bailout of U.K. banks but an effort to improve lending to consumer and businesses.Yen was roughly flat at 90.60 after hitting a high of 91.23 levels .Japanese Industrial production declined by a record 8.5% in November from the previous month, revised down from an initial estimate of 8.1% decline. Meanwhile, production was down 16.6% annually.

Australian Dollar was volatile-jan19.

Australian Dollar was volatile testing both the topside and downside as the market searched for new direction. currency has R1: 0. 6880, R2: 0.6890 ,S1:0.6720,S2: 0.6710. Chart pattern signals bull note for the day .Trading range is expected between 0.6730-0.6870 levels Stochastic and momentum are seen trending up giving bullish signals .Currency is seen trading above the moving average.

Yen had a small bull rally-jan 19.

Japanese Yen was sold as stock markets rallied across the world. Many market participants expect an Obama rally this week and this prompted short covering into the weekend. Looking ahead for November Industrial Output expected to be confirmed at -8.1%

Technical Outlook:
YEN R1: 91.90 S1:90.10
R2: 92.10 S2:90.00
yen chart pattern indicates the currency to be on a bull note for the day. Trading range for the day is expected between 90.20 - 91.80 levels . Stochastic is trending up pointing towards upward correction and the currency is seen trading between the moving averages

Euro and pound found strength on the downbeat -jan 19.

Euro found strength on the downbeat US data gaining across the board. . Helping Euro was reported comments from Trichet that he had no plans for a zero interest rate policy. Sterling rallied into the weekend but reaction to a new Banking bailout plan was mixed and EUR/GBP rallied into the close. The cable rally ran into resistance at the key 1.5000 level and selling was intensified as equities fell in early US trade.

Tech Outlook:

EURO R1: 1.3460 S1:1.3260
R2: 1.3480 S2:1.3240
chart pattern indicates the currency to give a small upward correction for the day. Trading range for the day is expected between 1.3280-1.3450 levels for the day. Momentum is seen trending up giving bullish signals and stochastic is also supporting the same.

GBP R1: 1.5000 S1: 1. 4720
R2: 1.5020 S2: 1. 4700
chart pattern shows the currency to remain on a bullish note for the day. Trading range is expected between 1.4740-1.4980 levels for the day. Currency is trading above the moving average and stochastic is also seen trending up giving bullish crossovers .

Indian Rupee inched up -jan 19

Indian Rupee inched up propped by firmer Asian stock markets but gains may be limited by importer dollar buying. U.S. Dollar had a volatile trading session initially weakening throughout the day as markets gained confidence and equities markets rallied in Europe and Asia. Weak US data and concerns about Citibank and Bank of American sent US stocks lower at the start of the session which helped the Dollar to strengthen but a late rally allowed this safe haven demand to subside. December CPI fell -0.7% broadly as expected while the core was flat. Of concern was Industrial Production which fell 2% in December while Capacity Utilization dropped to 73.6%. Looking ahead for Public Holiday in the US.
USDINR chart pattern gives bearish signals and currency is expected to trade in the range of 48.48-48.77 levels for the day. With good support seen at 48.45 levels . key resistance is seen at 49.80 levels. Stochastic is seen trending down and the currency is seen trading below the moving average but caution required as market is trading on the lower Bollingers.

Evening Report-jan 16.

Rupee was firm but moved in a narrow range against the U.S. unit as dollar sales from banks were offset by demand from importers amid thin volume trade. Non-deliverable forward dollar/rupee rates were down today tracking the greenback's fall in the spot market here. Stock Market climbed further, to be up by 3 percent on the day, raising hopes of some capital inflows, while a weaker dollar overseas also helped sentiment. U.S. consumer prices are expected to have realized its first annualized drop . Falling oil prices have been the main driver of lower prices, but the lack of consumer demand has also forced retailers to slash prices in order to lure customers. Job losses in excess of a 1 million over the last two months of the year have led to consumer’s retrenching which may continue to add pressure to prices. The decline may raise concerns over corporate profits which have been a main source of recent risk aversion. If that sentiment continues then we may see continued dollar strength. Additionally, the U of M consumer confidence reading is expected to decline to 59.0 from 60.1 which will add to future domestic growth concerns. The increase in demand for risky assets will lead to the selling of U.S. Treasury’s and most likely dollar weakness on the day. Euro reaching as high as 1.3285 as it continued to find support following ECB President Trichet’s signaling that the central bank will most likely pause their current easing policy in February. The Euro traded sideways since running into resistance as bullish momentum was derailed by the Euro –Zone trade balance report showing that exports fell the most in eight years. The region reported a deficit of 7.0 billion for November after a surplus of 1.0 billion the month prior. The region saw demand fall from three of the world’s largest economies as exports to the U.S., Japan and the U.K. fell. Although the Euro may continue to find support with the prospect of a rate cut in February, the fact that the region’s sinking deeper into a recession will limit upside potential. . Pound continues to remain range bound which will make technical factors more significant in future price action. We may see fundamental come back into play next week with CPI, BoE minutes, and employment data on the economic docket. Markets are also expecting the BoE to slow their easing policy with only 28 bps of rate cuts anticipated. Therefore we may have seen the currency put in a bottom which could lead to more upside potential. yen fell the most on speculation stock gains and measures to stabilize the U.S. financial system will prompt investors to sell the Japanese currency and buy higher-yielding assets

Australian Dollar took advantage of US stocks rally-jan 16.

Australian Dollar took advantage of the late rally in US stocks to reverse losses that were seen on the back of weak commodities and rising risk aversion. December Unemployment came in better than expected at -1.2K vs. -20k Forecast. Also released the December Unemployment Rate which jumped to 4.5% vs. 4.4% previously
R1: 0. 6820 S1:0.6580
R2: 0.6830 S2: 0.6560
Chart pattern signals bull note for the day .Trading range is expected between 0.6595-0.6800 levels Stochastic and momentum are seen trending up giving bullish signals .Currency is on the moving average.

Japanese Yen fell on speculation stock gains-Jan 16.

Japanese Yen was volatile initially gaining as Asian stocks slumped following the US lead. A reversal in US stock direction allowed all the crosses to stage a relief rally. November Machine Orders fell 16.2% vs. -8.1% forecast. Currency fell on speculation stock gains and measures to stabilize the U.S. financial system will encourage investors to buy higher-yielding assets funded in Japan’s currency.

YEN R1: 90.90 S1:89.50
R2: 91.10 S2:89.40
yen chart pattern indicates the currency to be on a bull note for the day. Trading range for the day is expected between 89.70 - 90.80 levels . Stochastic is trending up pointing towards upward correction and the currency is seen trading between the moving averages, but bullish crossover of MACD confirms the bull note

Euro was volatile but Sterling rose -Jan 16.

Euro was volatile holding to a tight range until the ECB meeting where they cut as expected to 2.0% from 2.5% previously. ECB President Trichet noted that the next meeting of note will be in March when further GDP and Inflation data is available. Traders took this as a pause on rate cuts and bought up the Euro to day highs before stock weakness and large falls in Oil pushed the Euro lower. Looking ahead for November Trade Balance previously at 0.9bn. . Sterling rose as the European Central Bank lowered its benchmark rate, prompting traders to bet it will keep easing borrowing costs while the Bank of England nears the end of its rate cuts.

Technical Outlook:

EURO R1: 1.3330 S1:1.3060
R2: 1.3350 S2:1.3040
chart pattern indicates the currency to give a small upward correction for the day. Trading range for the day is expected between 1.3080-1.3320 levels for the day. Momentum is seen trending up giving bullish signals and stochastic is also supporting the same. But caution signal is given by the moving averages which is supporting the bear note.

GBP R1: 1.4900 S1: 1. 4620
R2: 1.4930 S2: 1. 4580
chart pattern shows the currency to remain sideways to bullish for the day. Trading range is expected between 1.4630-1.4870 levels for the day. Currency is trading between the moving average and stochastic is also seen trending up giving bullish crossovers .

Rupee crept up on firm stock markets-Jan 16.

Rupee crept up following firm regional stock markets, but gains are likely to be limited by the dollar's strength against some Asian currencies.USDINR chart pattern gives mixed signals and currency is expected to trade in the range of 48.68-48.95 levels for the day. With good support seen at 48.62 levels . key resistance is seen at 49.08 levels. Stochastic is seen trending down and the currency is seen trading below the moving average giving mixed signals only break on either side can confirm the trend.

Evening Report-Jan 13.

Rupee fell and closed at 49.12 levels against U.S. dollar because banks bought greenback noting that local shares trimmed gains.Dollar demand from importers also dragged the Indian unit lower.However dollar sales from some exporters prevented further fall in the Indian unit.The Dollar continues to benefit from a flight to safety as markets continue to lower expectations for a rebound in global growth. The dismal labor reports last week has dimmed any hopes of a recovery on 2009 and lowered expectations for corporate profits. The U.S. trade deficit expected to have decline mainly duet o slumping oil prices which cut into the value of imports. However if part of the gain in trade was due to rising exports then it may increase expectations for global demand and offset the bearish sentiment prevailing on the equity markets. Fed chairman Ben Brernanke is scheduled to speak for the first time since the central bank lowered interest rates to the current 0%-25% range. The MPC’s leader’s comments could drive sentiment in the markets especially if he paints a dour outlook for the U.S. economy. However if the chairman believes that the measures that have been taken and the proposed fiscal stimulus plan are enough to lead to the economy to a return to growth, then we could see bullish momentum in the equity markets and possible dollar weakness. Euro started trading on the defense despite bullish comments from ECB President Trichet and the announcement that the German government agreed on the details of a 2nd stimulus package worth EUR 50 bln. The program will focus on increased infrastructure investment to increase economic activity and tax cuts. Meanwhile President Trichet at a meeting in Switzerland said that he saw a significant global recovery in 2010 which could be a sign that the central bank may limit their future easing. Expectations are that the MPC will cut rate by 50bps t its policy meeting on Thursday. However the S&P’s announcement that it may cut Spain’s debt rating and was looking closely at other European nations sent the single currency to the lowest level in a month at 1.3227 before it found support which sent it back above 1.3300 erasing earlier losses. Pound would reach a low of 1.4611 after the U.K. trade balance report showed an increasing deficit despite the Sterling’s weakness. The U.K. visible trade balance widened to a record low of -£8.3 billion from -£7.6 billion as exports to China and the U.S. declined. Meanwhile U.K. house prices fell another 8.6% while the RICS housing report showed home sales falling to a record low. It appears that BoE Governor King’s contention that the pound’s weakness will act as a stimulus for the economy isn’t holding weight as the sharp drop in global demand has led to the biggest trade deficit on record. yen rose to new peaks against its most major counterparts as yen is seen as a safe-haven in times of economic uncertainty as the falling stock prices and heightened risk aversion re-emerged as dominant concerns for investors. Unwinding of carry trades results in traders liquidating their investments and scrambling for yen to repay their yen-denominated loans, which pushes up the value of the Japanese currency.

Yen soared as U.S.markets continued to weaken -Jan 13.

Japanese Yen soared as US stocks continued to weaken and the USD/JPY broke through 90 dragging down all the crosses. Trading was quiet in Asia as Japan was away on a bank holiday. November Current Account released down -65.9%.

Technical Outlook:

YEN R1: 89.80 S1:88.50
R2: 89.90 S2:88.40
yen chart pattern indicates the currency to be on a bear note for the day. Trading range for the day is expected between 88.60-89.70 levels .Currency is seen trading below the moving average giving bearish crossovers and parabolic is also supporting the bear note. Stochastic is trending down pointing towards downside correction.

Australian Dollar fell sharply with commodities -Jan 13.

Australian Dollar cracked 0.700 in early trade and never got back above the key level falling sharply with commodities and stocks. AUD/JPY fell over 4% on the day as the markets risk aversion notched higher. Noted strong support at .6770 will prove crucial going forward. Technical Outlook:
AUD R1: 0. 6850 S1:0.6660
R2: 0.6880 S2: 0.6650
Chart pattern signals bear note for the day .Trading range is expected between 0.6680-0.6840 levels Stochastic and momentum are seen trending down giving bear note . Currency is seen trading below the moving average giving bearish crossovers.

Euro and Pound continued to be under pressure -Jan 13

Euro continued to come under pressure as the market focuses on Thursday’s Rate Decision with 0.5% the consensus but some looking for a 0.75% cut. Also weighing on the Euro was concern over Ireland and Greece Sovereign debt been put on rating watch by S&P. Sterling continued to come under pressure as GBP/JPY selling forced the cable below 1.5000. Stops were hit under the pivot level and selling accelerated down to 1.48 supports. Looking ahead for November Trade Balance forecast at -7.5 .

Technical Outlook:

EURO R1: 1.3450 S1:1.3240
R2: 1.3480 S2:1.3230
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3250-1.3430 levels for the day. Momentum is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note but stochastic is giving caution signal.

GBP R1: 1.4930 S1: 1. 4660
R2: 1.4950 S2: 1. 4650
chart pattern shows the currency to remain on bear note for the day. Trading range is expected between 1.4680-1.4930 levels for the day. Currency is trading below the moving average and stochastic is also seen trending down but caution is given by parabolic which is supporting bull note .

The Rupee edged lower -jan 13

The Rupee edged lower following the dollar's gains against some Asian currencies but a sharp fall is likely to be limited as Asian stock were mixed

Technical Outlook:

USDINR chart pattern gives mixed signals and currency is expected to trade in the range of 48.65-49.10 levels for the day. With good support seen at 48.55 levels . key resistance is seen at 49.20 levels. Stochastic is seen flat and the currency is trading above the moving average giving mixed signals.

evening report jan 12

Indian Rupee fell owing to heavy capital outflow by foreign funds amid weak stock markets due to the Satyam fiasco. The non-deliverable forward dollar rates rose tracking upward movement in the spot market amid thin volumes. There was a difference of around 12 paise between the onshore and offshore rates but arbitrage was mild. An empty U.S. calendar will leave price action at the mercy of the broader macro themes with the dollar possibly benefiting from growing concerns over the global economy. As the prospects for a rebound in 2009 dwindle, we are seeing the carry trade unwind and a renewed flight to safety. Yet, the lack of dollar/ yen price action cast some doubt on the risk aversion play. However, a holiday in Tokyo may explain the lack of interest in the pair. Now that NFP’s are in the rear view mirror and the ECB rate decision lies ahead, markets may start to focus on weakness outside the U.S. which could lend dollar support throughout the week. However, a possible joint venture between Morgan Stanley and Citigroup could spark risk appetite and lead the green back lower. Euro fell nearly 400 bps during overnight trading as markets started to price in an expected ECB rate cut on Thursday. An empty fundamental calendar put the week’s most significant event risk in full focus and the expectations that the central bank will lower its benchmark rate by 50 bps led to a sharp sell off in the Euro. Additionally comments from International Monetary Fund’s Managing Director raised the prospect for more easing from the ECB, when he said Europe is “underestimating the needs” of fiscal stimulus for the economy. Despite the concerns of President Trichet that bringing interest rates too low too soon will trap the MPC and leave them without recourse in the future, markets are expecting that the weakening economy and falling prices will force the MPC to ease further. Pound weakened against the dollar and the Euro despite Prime Minister’s Gordon Brown’s pledge of £500 million to encourage hiring. The plan will look to increase support for anyone still unemployed after six months as concerns mount that the current recession will continue to weigh on hiring. The lack of any significant fundamental data will leave the Sterling trading off of Euro and Dollar sentiment for the week which could lead to a rebound versus the single currency and further weakness against the dollar. Japanese Holiday Mutes Price Action in yen

Australian Dollar traded lower on weaker Commodities -Jan 12

Australian Dollar traded between 0.71 and 70 although was better offered than bought against the greenback. Commodities were generally weaker as recession fears hurt demand.
Technical Outlook:
AUD R1: 0. 7050 S1:0.6830
R2: 0.7080 S2: 0.6820
Chart pattern signals bear note for the day .Trading range is expected between 0.6840-0.7030 levels .Stochastic and momentum are seen trending down giving bear note . Currency is seen trading below the moving average giving bearish crossovers.

Japanese Yen strengthened-Jan 12.

Japanese Yen strengthened considerably as economic fundamentals and investor sentiment soured. In focus is the key 90 level on the USD/JPY which will provide short term direction.

Technical Outlook
YEN R1: 90.80 S1:89.30
R2: 90.90 S2:89.20
yen chart pattern indicates the currency to be on a bear note for the day. Trading range for the day is expected between 89.40-90.60 levels .Currency is seen trading below the moving average giving bearish crossovers and parabolic is also supporting the bear note. Stochastic is trending down pointing towards downside correction.

Euro dropped after the US but Sterling was better supported -Jan 12

Euro dropped after the US jobs data was released falling heavily from the 1.3700 level to slide under 1.3500. European Retail Sales beat forecasts at 0.6% vs. 0.1% expected in November. German Industrial Production continued to deteriorate to -3.1% vs. -2.0% expected in November. Sterling was better supported than the EURO but did come under pressure falling from 1.53 to 1.51 as the USD was bought up after the employment data. December PPI input was down -2% and Output PPI was flat at 0.0%.

Technical Outlook:

EURO R1: 1.3480 S1:1.3280
R2: 1.3510 S2:1.3270
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3290-1.3460 levels for the day. Momentum is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note but stochastic is giving caution signal.

GBP R1: 1.5220 S1: 1. 4960
R2: 1.5250 S2: 1. 4950
chart pattern shows the currency to remain mixed for the day. Trading range is expected between 1.4980-1.5210 levels for the day. Currency is trading above the moving average and parabolic is also supporting bull note and stochastic is also seen trending down but caution is given by Momentum which is seen trending up.

Indian Rupee fell on Satyam fiasco

Indian Rupee fell against the US dollar in early trade owing to heavy capital outflow by foreign funds amid expectations of weak opening of the Indian bourses due to the Satyam fiasco.

Technical Outlook

USDINR chart pattern shows a doji reversal pattern and is expected to trade in the range of 48.25-48.80 levels for the day. With good support seen at 48.15 levels . key resistance is seen at 48.90 levels. Stochastic is seen flat and the currency is trading on the moving average only a break on either side can confirm the trend.

EVENING REPORT

The Rupee at 48.54/56 per dollar, from the previous close of 48.80/81, after inflation data came in below market expectations and the broad dollar weakness against major currencies overseas improved sentiment for the local unit. The dollar headed for its first weekly loss against the yen in three weeks before a U.S. payrolls report that may show the economy lost jobs every month in 2008 and the unemployment rate rose to a 16-year high. Retail spending in Germany rose 0.7% in November, slightly better than the economists’ forecast of 0.5% gain. However, the October reading revised down to -2.2% from -1.6% initially, suggesting that the consumption still far from recovery. With the unemployment starting to rise in December, the private consumption may remain subdued over the following months as Europe’s largest economy faces its worst recession in decades, which could lead the European Central Bank to lower borrowing costs next week. Amid the releases, the Euro declined against other major currencies. The U.K. pound headed for its biggest weekly advance against the euro since the common currency’s debut in 1999 as the Bank of England slowed the pace of interest-rate cuts. The UK PPI for December and the industrial production report for November were released . Amid the release, the pound gained slightly against other major currencies. Yen reversed the previous gains and remained mixed.

currency outlook jan 09

Indian unit opened with high gap and expected to be on mixed for the day. Trading range is expected between 48.60-49.30.currency holds its support at 48.50 levels and has its resistance at 49.40 levels for the day. Stochastic remains on bull note for the day.

EURO R1: 1.3750 S1:1.3560
R2: 1.3760 S2:1.3550
chart pattern indicates the currency to have a mixed note for the day. Trading range for the day is expected between 1.3590-1.3730 levels for the day. Stochastic is seen trending up and the currency is trading on the moving average .

GBP R1: 1.5240 S1: 1. 5100
R2: 1.5250 S2: 1. 5090
chart pattern shows the currency to be on consolidation phase. Trading range is expected between 1.5140-1.5210 levels for the day. Currency is seen trading on the moving average and stochastic is seen trending upside for the day.

YEN R1: 92.10 S1:90.60
R2: 92.30 S2:90.50
yen chart pattern indicates the currency to have a downside movement for the day. Trading range for the day is expected between 90.80-91.80 levels. Stochastic remains bear but the candle pattern remains in neutral waiting for further clues from the market.

AUD R1: 0. 7150 S1:0.6990
R2: 0.7160 S2: 0.6980
Chart pattern gives bearish signals for the day .Trading range is expected between 0.7030-0.7140 levels .Stochastic remains down for the day.

Fundamental view

The Rupee weakened in early deals on Friday, on worries that foreign funds would resume dumping their holdings in local shares following the country's biggest corporate scandal. U.S. Dollar Trading continued to weaken as the market factored in a weak data for the US ahead of Fridays Unemployment numbers. Weekly Jobless Claims fell for a second week at 467K vs. 491K previously. Of concern was November Consumer Credit which dropped -7.94bln. In U.S. share markets, the NASDAQ was up 17 points (1.12%) and the Dow Jones was down 27 points (-0.31%). . The Euro surged as the market sold the Dollar although it did come under pressure against JPY which rose on risk aversion. Was range bound against the resurgent GBP with the 90 level attracting attention. Q3 GDP was confirmed at -0.2%. Unemployment ticked higher to 7.8% as expected. November German Factory Orders plummeted -6.0% adding to concern over the German Economy. Looking ahead, Eurozone Retail sales are forecast at 0.0% vs. -0.8% previously.· The Japanese Yen continued to pullback on the USD/JPY as the markets reacted to stock weakness in Asia and crosses were heavy lead by the AUD/JPY and other higher yielding pairs. Support at 91 proved solid overnight and the market awaited tonight’s US jobs data. The Sterling rallied as the market bought GBP after the BoE cut only 0.5% with some looking for a bigger 1.0% cut. USD weakness helped cable higher but weak stocks capped GBP/JPY rallies. Looking ahead, December PPI input forecast at -2.2% m/m and PPI output -0.7% m/m.· The Australian Dollar tested 0.7000 as risk aversion and weak stocks hurt AUD sentiment. USD weakness and a recovery in Gold allowed the AUD to reclaim the 0.7100 level. The November Trade Balance fell 1.45Bn from 2.96B previously. Also weak, November Building approvals which dropped 12.8% vs. -3.1% previously.

Evening report jan 08

The dollar rose against the euro on Thursday, recovering some ground made after steep US job losses in the private sector, as some traders thought the dollar's slide the previous day was too sharp.The dollar's rebound was helped by its gains versus the Australian dollar after a shocking slump in home building approvals reinforced the case for further cuts in interest rates for the country to avoid recession.The European single currency nudged back toward the day's lows after data showed a sharper-than-expected drop in economic sentiment across the region last month.The European Commission on Thursday said its economic sentiment indicator for the euro zone fell 7.8 points to 67.1 in December, the lowest reading since the index was launched in 1985. German trade balance report for November is due at 2.00am ET. Trade surplus is seen at EUR16.4 billion, the same as in October. At the same time, the Statistics Estonia is expected to reveal the inflation report for December and for the full year. The British pound was mixed against major currencies as traders awaited an interest-rate decision by the Bank of England's rate-setting Monetary Policy Committee .the yen extended its Asian session's uptrend against other major currencies as a drop in global stock prices prompted investors to reduce holdings of higher-yielding assets funded in Japan. The yen jumped to new multi-week highs against the euro and the franc, 6-day high against the dollar and a 2-day high against the yen.

technical view jan 08

EURO R1: 1.3690 S1:1.3500
R2: 1.3730 S2:1.3490
chart pattern indicates the currency to have a bull note for the day. Trading range for the day is expected between 1.3520-1.3685 levels for the day. Stochastic is seen trending up and the currency is trading on the moving average . The trend is seen as a consolidation for a short term since the long term view indicates the currency to be on bear note
GBP R1: 1.5120 S1: 1. 5000
R2: 1.5140 S2: 1. 4990
chart pattern shows the currency to be on upside movement for the day. Trading range is expected between 1.5020-1.5095 levels for the day. Currency is seen trading on the moving average and stochastic is seen trending upside for the day.
YEN R1: 93.30 S1:92.00
R2: 93.50 S2:91.80
yen chart pattern indicates the currency to have a mixed movement for the day. Trading range for the day is expected between 92.10-93.10 levels. Stochastic remains bear but the candle pattern remains in neutral waiting for further clues from the market.
AUD R1: 0. 7150 S1:0.6990
R2: 0.7160 S2: 0.6980
Chart pattern gives bearish signals for the day .Trading range is expected between 0.7005-0.7130 levels .Stochastic remains down for the day.

daily report jan 08

U.S. Dollar Trading weakened across the board as the December Private ADP Jobs report suggested -693K job losses vs. -473K forecast. Stocks slumped on concerns the economic slowdown will be longer than first thought. Oil fell over 10% as Weekly Crude Oil Inventories jumped by 6.7Mln vs. 0.7Mln forecast. In U.S. share markets, the NASDAQ was down 53 points (3.23%) and the Dow Jones was down 245 points (-2.72%). The Euro was well supported as the market dumped US dollars. Gains were limited as Oil plunged. Eurozone Data was poor with German Unemployment jumping to 7.6% with Unemployment at 3.102 Mln in December. Pound strength saw the 90 level erased on the EUR/GBP. . Looking ahead, German November Trade Balance is forecast at 14.5Bn vs. 15.8Bn. · The Japanese Yen made solid gains against the Dollar as stocks slumped and fear entered the market. GBD/JPY and EUR/JPY managed small rallies as their respective majors gained but even these fell well off their highs. · The Sterling (GBP) enjoyed a very solid rally breaking above 1.5000 and pushing up to mid 1.52’s before falling back as profit taking appeared before today’s BoE Interest Rate Meeting. EUR/GBP selling saw the GBP advance against all 16 of the most actively traded currencies. Looking ahead, Bank of England meeting widely expected to cut -0.5% to 1.5% from 2.0% previously. The Australian Dollar (AUD) tested Tuesday’s high after the terrible US data but risk aversion saw the AUD fall back to day lows. AUD/JPY selling remerged and steep falls in Oil and Gold weighed.

Evening Report-Jan 07.

Rupee closed at 48.79 per dollar, from its previous close of 48.66/69, due to dollar demand from foreign funds following a steep fall in the main stock index. The dollar held near its strongest in three weeks against the Euro earlier on speculation that U.S. President-elect Barack Obama s $775 billion package of tax cuts and government spending will help the economy recover from a recession. Today will we get a glimpse into the state of the labor market with Challenger job cuts and ADP employment figures due to cross the wires. November’s ADP figures have already been significantly revised lower to a loss of 472,000 from 250,000 which is the most since records began in 2001. Euro rose against the dollar and the yen on speculation that the European Central Bank will cut interest rates at a slower pace than its major counterparts. Derivatives trading showed the ECB will cut borrowing costs by at least 25 basis points at a meeting on Jan. 15, still leaving its benchmark rate higher than the 0-0.25 percent in the U.S. and 2 percent in Britain The German Federal Statistical Office said that the ILO jobless rate stood at a seasonally adjusted 7.1% in November, compared with 8% recorded in the previous year. yen showed weakness against the European currency while edged higher against the currencies of US and UK. British pound fell snapping a two-day gain. However we could see pound weakness heading into the rate decision with the potential for sharp moves in either direction depending on the comments from the central bank. Conversely a signal that a ZIRP is inevitable could lead to Pound weakness.

Australian Dollar was volatile-jan 07.

Australian Dollar was volatile but better supported ending at new 3 month highs above 0.7200. High Commodities continued to support. Looking ahead for November Retail sales are forecast at -0.3% vs. 0.7% previously.
Technical outlook:
AUD R1: 0. 7280 S1:0.7120
R2: 0.7290 S2: 0.7100
Chart pattern signals bear note for the day .Trading range is expected between 0.7130-0.7270 levels .Stochastic and momentum are seen flat . Currency is seen trading above the moving average giving a mixed outlook.

Japanese Yen was sold off aggressively

Japanese Yen was sold aggressively against most currencies as the uptrend continued to be tested on the USD/JPY. The 94.00 level proved to have little resistance although as Stock came off highs in the US the pair slipped back below this rate.

Technical Outlook:
R1: 94.90 S1:94.30
R2: 95.00 S2:94.20
yen chart pattern indicates the currency to move sideways for the day. Trading range for the day is expected between 93.40-94.80 levels .Currency is seen trading above the moving average and parabolic is also supporting bull note. But stochastic is trending down pointing towards a small downside correction.

Euro continued to slide but Sterling had a mixed outlook-jan 07.

Euro continued to slide in Europe as preliminary December Inflation showed a drop to 1.6%y/y well below the 2-3% band opening up the potential of more rate cuts. The pair bounced off support at 1.3300 rallying as FOMC minutes painted a bleak US picture. Looking ahead for December German Unemployment is forecast at 3.07Mn with an unemployment rate at unchanged at 7.5%. Also released Euro zone PPI output for November seen falling -1% to a 4.3% y/y rate. Sterling mixed data and a buoyant market mood allowed the pair to rally back towards 1.5000 on cable. Heavy GBP/JPY buying and EUR/GBP once again supported the pair. December PMI Services increased to 40.2 vs. 39 previously. Also released Nationwide House Prices which dropped -2.5% in December.

Technical Outllook:
EURO R1: 1.3600 S1:1.3380
R2: 1.3620 S2:1.3370
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3390-1.3580 levels for the day. Momentum is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note but stochastic is giving caution signal.

GBP R1: 1.5010 S1: 1. 4760
R2: 1.5030 S2: 1. 4750
chart pattern shows the currency to remain mixed for the day. Trading range is expected between 1.4790-1.4990 levels for the day. Currency is trading above the moving average and parabolic is also supporting bull note and stochastic is also seen trending up but caution is given by Momentum which is seen trending down.

Rupee appreciated against the greenback -Jan 07.

Rupee appreciated against the greenback in early trade following dollar selling by exporters amid fresh capital inflow on expectations of higher opening on the bourses in line with firming global equity markets.

Technical Outlook:

USDINR opened on a lower note and is expected to trade in the range of 48.15-48.60 levels for the day. With good support seen at 48.05 levels . key resistance is seen at 48.70 levels. Stochastic is seen trending down and the currency is trading on the lower Bollingers giving bearish outlook.

Evening Report-Jan 06.

Rupee closed at 48.69 levels erasing a part of its losses against the U.S. dollar because banks sold the greenback noting the recovery in local shares. Some foreign banks were selling dollars. Dollar sales by exporters at weaker rupee levels also helped the Indian unit to erase a part of its early losses.The dollar remained mixed during overnight trading as it continues to gain against the Euro, Yen and Swiss Franc while losing ground against the Pound and Canadian Dollar. The upcoming ISM Non-manufacturing report may threaten bullish sentiment for the greenback as economists are predicting that the sector contracted further to set a fresh all-time low of 37.0 following November’s 37.3. Sharp declines in new orders led last month’s decline which may be a weighing factor for the sector that accounts for over 70% of GDP. Pending Home sales and factory orders for November will also present event risk as both are predicted to show further weakness. The FOMC will also release their minutes from their last meeting where they lowered the benchmark interest rate to 0% -0.25%. Although the central bank doesn’t have room for more easing the minutes will give insights into the outlook for the economy. The MPC has recently taken up the cause to lower consumer borrowing costs which may include asking that TARP funds be used to purchase distressed assets as it was originally intended. The prospect of the U.S. consumer coming back on line may add longer term dollar support and an increase in risk appetite.The Euro continue to remain under heavy selling pressure which was accelerated by the Euro-Zone CPI estimate slowing to 1.6% from 2.1% on the back of falling energy prices and waning demand.Meanwhile, the final Euro-Zone service reading was revised slightly higher to 42.1 from the preliminary reading of 42.0 but contracted for a seventh month and despite the increase was the lowest reading on record. The sharp fall in prices will raise deflation concerns which we saw yesterday has become a concern for the ECB. Therefore expectations have grown that the central bank will lower their benchmark rate by another 25-50 bps at their January 15th meeting. Yet, Credit Suisse overnight index swaps saw a shape decline in expectations for rate cuts over the next twelve months to 65 bps from 153 bps on December 24th. Therefore, we may see the ECB signal an end to easing following another rate reduction which may see the single currency reverse its losses following the decision. Indeed, rising commodity prices on the back of an improved outlook for the global economy will alleviate some deflation concerns. However, expect the Euro to remain under pressure heading into the rate decision with it possibly targeting support at 1.2500. The Pound traded higher despite choppy price action as weakening fundamental data and an expected rate cut have prevented a stronger bullish push. Indeed, the December Nationwide housing price gauge showed prices fell 2.5% which was the biggest drop since 1997 led to early Sterling weakness. The ever slumping housing sector has remained a burden for consumers and has sunk consumer confidence to an all time low of 47 in December. Meanwhile, the PMI service reading unexpectedly rose to 40.2 from 39.0 but still remained near a record low and the sector which accounts for the majority of growth in the country contracted for an eighth month. Despite the fundamental data suggesting an almost certain rate cut by the BoE, pound bulls haven’t been deterred leaving the possibility that a bottom may have been put in place at the December 31st low of 1.4351. A rate reduction could lead to another test of this price level, but beware of a subsequent reversal which tends to follow a rate change that is believed to be the final in a cycle.Yen Slumps To 1-month Low Against Dollar as investors turned upbeat on President-elect Barack Obama's proposed economic stimulus package, and exporters got a boost from a weaker yen.

Australian Dollar supported by commodity prices-jan 06.

Australian Dollar continued to be well supported as commodities rallied and investors searched for Yield. AUD/JPY was very well supported and made new 2 month highs.

Technical Outlook:
AUD R1: 0. 7180 S1:0.7010
R2: 0.7190 S2: 0.7000
Chart pattern signals bear note for the day .Trading range is expected between 0.7020-0.7160 levels .Stochastic and momentum are seen trending down . Currency is seen trading on the moving average only a break of it can confirm the bear note.

Japanese Yen continued to test the upside-Jan 06.

Japanese Yen continued to test the upside losing value against all crosses as more risk taking entered the market and investors flooded back to high yielding currencies. AUD/JPY and CAD/JPY were major improvers overnight.

Technical Outlook:

YEN R1: 93.90 S1:92.30
R2: 94.00 S2:92.20
yen chart pattern indicates the currency to move sideways for the day. Trading range for the day is expected between 92.40-93.80 levels .Currency is seen trading above the moving average and parabolic is also supporting bull note. But stochastic is trending down pointing towards a small downside correction.

Euor fell heavily but pound gained -jan 05.

Euro fell heavily as resistance at 1.3800 gave way and some negative news emerged. ECB Member’s indicated that they supported cutting rates if inflation continues to drop. Looking ahead for December German PMI is forecast at 46.4 vs. 45.1 previously and Euro Zone is seen at 42 vs. 42.5. The Sterling gained against the USD as support below 1.45 and then tracked Oil as it rallied in New York. The Crosses supported with large gains in GBP/JPY and heavy EUR/GBP selling the main contributors. The market is looking to Thursday’s BoE meeting as the next major market event for the pound. Looking ahead for December Services PMI are forecast at 39 vs. 40.1 previously and December Inflation is expected at 1.8% vs. 2.1% previously.

Technical Outlook:
EURO R1: 1.3780 S1:1.3420
R2: 1.3800 S2:1.3400
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3450-1.3750 levels for the day. Stochastic is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note.

GBP R1: 1.4750 S1: 1. 4520
R2: 1.4780 S2: 1. 4500
chart pattern shows the currency to remain mixed for the day. Trading range is expected between 1.4530-1.4730 levels for the day. Currency is seen trading on the moving average and parabolic is also supporting the bear note but momentum is seen flat giving caution.

Rupee edged lower-jan 06..

Rupee edged lower following the dollar's gains against some Asian currencies but gains in regional stock markets are stemming a sharp slide. USDINR is expected to trade in a narrow band for the day and is expected to trade in the range of 48.50-48.85 levels for the day. With good support seen at 48.30 levels and breach of it would see 47.80. key resistance is seen at 49.00 levels. Stochastic is seen trending up giving bullish crossovers but tight band width indicates a narrow trade.

EVENING REPORT-JAN 05

Rupee ends the day at 48.54 levels. Profit booking spree seems to have hit bonds . They have retreated from their six year lows early in the day following coordinated fiscal and monetary measures by policymakers to boost growth. Currency also has taken a breather from the early morning rally to trade at 48.72 against the dollar The non-deliverable forward dollar/rupee rates were off lows as traders bought the greenback noting its rise against major currencies. The economic docket will provide little event risk for the dollar today with only the second tier indicators vehicle sales and construction spending. The dollar’s overnight strength may continue today if investors subscribe to the argument that the U.S. economy will be the first to emerge from the current financial crisis. The New Year brings the fiscal stimulus plan proposed by President Barack Obama in sight .Details are starting to emerge regarding the aide package which includes $300 billion in tax breaks. Potentially 40% of the stimulus will include a $50 tax reduction for individuals and $1000 for couples. This proposal could help boost consumer demand which already gaining from the reduction in gasoline prices. However giving the dollar’s strong correlation to risk appetite the prospect of the increased consumer spending could lift equity markets which could weigh on the greenback. Euro fell almost 300 bps to 1.3656 as European trading started on comments from ECB Vice-President that deflation has become a concern for the central bank and further easing may be necessary to achieve price stability. These remarks were reinforced by Italian CPI dropping from 2.7% to 2.4% in December. Meanwhile Euro-Zone Sentix investor confidence reading unexpectedly rose to -34.4 from -42.3 on the back of interest rate reductions and fiscal stimulus packages from the various nations. The positive fundamental data helped slow the Euro’s decline as it has since consolidated above 1.3660. The central bank is clearly considering more easing which could come as soon as January 15th. Expectations that the region’s economy will continue to slow and the drop in prices will accelerate will leave the MPC will little choice but to continue their current easing cycle. Pound saw see-saw action during the overnight session as it fell over 100 bps after an earlier test of 1.4580 before retracing back above 1.4500. The recent bullish momentum would ignore the lowest construction PMI reading. The activity gauge dropped to 29.3 from 31.8, as the sector continues to be impacted by the worse housing crisis since the Great Depression. The failure of the sector to bottom has dragged on the economy. The BoE may be forced to continue its aggressive easing policy and is expected to reduce rates by another 50-100 bps on Thursday. The expected rate reduction may lead to the Sterling trading heavy leading up to the decision. Yen dropped over 100 points against the dollar as the prospect of the U.S. fiscal stimulus plan has led to a boost on risk appetite sending the Nikkei higher by 2%. The pair would reach as high as 93.40 before finding resistance. However, we may see weakness going into the U.S session as European markets have pared gains and U.S. futures are pointing to a lower open. Another dismal U.S. NFP report looms at the end of the weak which may curb bullish sentiment.

Australian Dollar surged higher-Jan 05.

Australian Dollar surged higher tracking both the stocks and Oil, breaking above 0.7000 and testing month highs above 0.7100. Investors flocked back to the beaten down commodity currency although most analysts see upside potential as limited.

Technical Outlook:

R1: 0. 7180 S1:0.7030
R2: 0.7190 S2: 0.7010
Chart pattern signals bear note for the day .Trading range is expected between 0.7050-0.7160 levels .Stochastic and momentum are seen trending down confirming the bear note.

Japanese Yen was sold across the board-Jan 05.

Japanese Yen was sold across the board as a major break to the topside on USD/JPY given the continued recovery in equity and debt markets. Potential to the topside is seen limited though as the Global economy further declines into recession in the coming months.

Technical Outlook:
YEN R1: 92.90 S1:91.50
R2: 93.10 S2:91.40
yen chart pattern indicates the currency to have a bull run for the day. Trading range for the day is expected between 91.70-92.80 levels .Currency is seen trading above the moving average and parabolic is also supporting bull note.

Euro and Pound lost ground against dollar-Jan 05.

Euro lost ground as it fell off the 1.4000 handle and support from crosses dissipated. December PMI manufacturing was revised lower to 33.9 vs. 34.5. Looking ahead for January Sentix is expected at -44 vs. -42.3. Sterling rallied initially in early Asia before support faded and the pair slumped back to support at 1.45. Trading was volatile in thin markets with most looking to Monday as the first trading day of the year. November Mortgage approvals plummeted to 27K vs. 33K expected and December PMI was revised higher to 34.9 vs. 33.5 forecast.

Technical Outlook:

EURO R1: 1.3980 S1:1.3780
R2: 1.3990 S2:1.3750
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3790-1.3970 levels for the day. Stochastic is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note.

GBP R1: 1.4590 S1: 1. 4350
R2: 1.4620 S2: 1. 4320
chart pattern shows the currency to be on a bearish note for the day. Trading range is expected between 1.4370-1.4580 levels for the day. Currency is seen trading below the moving average and parabolic is also supporting the bear note but momentum is trending flat giving caution.

Indian Rupee strengthened-Jan05.

Indian rupee rallied and federal bond yields plunged to lifetime lows on Monday following coordinated fiscal and monetary measures to boost sagging growth. USDINR is expected to have a mixed note for the day and is expected to trade in the range of 48.05-48.50 levels for the day. With good support seen at 48.00 levels and breach of it would see 47.80. key resistance is seen at 48.60 levels. Stochastic is seen trending down and currency opened on a lower note and is seen trading on the lower bollingers

Evening Report-Jan 02.

The Rupee weakened in the early trade and was seen at 48.94 against the dollar due to lack of dollars in the market and a widening current account deficit put pressure on the local unit,Rupee strengthend Following is the statement issued by Reserve Bank of India on further monetary stimulus measures and closed at 48.59 levls as RBI cuts repo, reverse repo rate by 100bps and CRR by 50bps and Govt has also expressed its need to push economic stimulusThe U.S.ISM manufacturing indicator is expected to show a decline to 35.4 from 36.2, which would be the lowest in almost three decades. Waning domestic demand combined with sharp declines in overseas orders has led to a deep contraction in the sector. The troubles of the U.S. auto maker’s will only add to the declining activity as they are shutting plants in order to avoid bankruptcy. The dollar could weaken on the data if fundamental factors are driving price action today. Also, If equity markets continue the bullish momentum from the last day of trading ion 2008, then we may see the greenback weaken on increasing risk appetite as safe haven flows leave U.S. Treasury’s seeking higher returns abroad. Euro started 2009 under heavy selling pressure falling to 1.3839, the lowest level in two weeks. The single currency would pare the majority of it earlier losses reaching above 1.3950 despite the final December PMI manufacturing reading being revised lower to 33.9 from a preliminary reading of 34.5. As manufacturing activity continues to contract and the regions labor markets continue to weaken pressure will mount for the ECB to continue easing rates. President Trichets comments that the past three rate cuts have yet been realized by the economy shows tat the central bank is reluctant to take rates lower. In the past the MPC has expressed fear of being trapped if they take rate too low which would leave them trapped without further recourse. Yet, the cries are mounting for more action from the central bank and another rate cut is very likely at their next policy meeting on January 15th. Therefore, we may see bearish Euro sentiment continue as interest rate expectations decline. Pound drop from its daily high of 1.4812 to a low of 1.4502 before consolidating as U.K. manufacturing and housing sectors showed further weakness. Indeed, mortgage approvals fell from 32,000 to 27,000. Additionally, house prices fell another 2.2% in December according to HBOS. Meanwhile, the December PMI manufacturing reading despite unexpectedly improving to 34.9 from a record low of 34.5 the month prior, contracted for the seventh straight month. Tight credit markets continue to cripple demand which may force the BoE to take further measures to loosen lending standards. Therefore, markets are expecting a rate cut from 50-100 bops which could lead to further Sterling weakness as we near the policy decision.Dollar and dropped versus the yen after a European manufacturing report showed the recession is deepening in the 16- nation region.

Technical outlook -Jan 02.

USDINR is expected to have a mixed note for the day and is expected to trade in the range of 48.60-49.30 levels for the day. With good support seen at 48.50 levels and key resistance is seen at 49.50 levels. Stochastic is seen trending up but caution required as market is trading in overbought levels near the upper Bollingers.
EURO R1: 1.4030 S1:1.3780
R2: 1.4050 S2:1.3750
chart pattern indicates the currency to give bearish note for the day. Trading range for the day is expected between 1.3790-1.4000 levels for the day. Stochastic is seen trending down giving bearish signals and currency is also trading below the moving averages supporting the bear note.
GBP R1: 1.4760 S1: 1. 4540
R2: 1.4780 S2: 1. 4520
chart pattern shows the currency to be on a bearish note for the day. Trading range is expected between 1.4550-1.4750 levels for the day. Currency is seen trading below the moving average and parabolic is also supporting the bear note but momentum is trending flat giving caution.
YEN R1: 91.70 S1:90.50
R2: 91.80 S2:90.40
yen chart pattern indicates the currency to have a slight bullish correction for the day. Trading range for the day is expected between 90.60-91.60 levels .Currency is seen trading between the fast and slow moving average and parabolic is also supporting bull note.
AUD R1: 0. 7080 S1:0.6890
R2: 0.7090 S2: 0.6880
Chart pattern signals mixed note for the day .Trading range is expected between 0.6910-0.7060 levels .Stochastic is seen trending down and currency is seen trading between the slow and fast moving averages.