Evening Report-Jun 30.

The Indian rupee erased gains after rising on customary month-end dollar demand from refiners and closed at 47.90 levels for the day. U.S dollar has started to regain its footing after rising oil prices and higher equity prices kept it under pressure during Asian trading. Slow growth and rising unemployment in Europe is weighing on risk appetite and could lead to dollar support heading into U.S. trading. However, the expected rise in consumer confidence to 55.3 from 54.9, which would be the highest since September 2008, could fuel demand for risky assets. Additionally, Chicago PMI is forecasted to rise to 39.0 from 34.9 as manufacturing steadily improves which will raise expectations for domestic growth and future employment. Therefore we could see the greenback trade lower on increased optimism and increased risk appetite. However, the S&P Case-Shiller house price data is also ahead and weakness in the housing market could dim the outlook for a recovery. Euro bulls have regained control after a brief sell off following weak money supply figures and German unemployment reaching 8.3%-the highest since June 2007. Although, we saw a 31,000 increase in the number of unemployed Germans it was less than the 45,000 that economists were expecting. The Euro-zone June CPI-estimate also printed better than expected at -0.1% versus -0.2% which will help the ECB keep rates at 1.00% as they maintain their price stability focus. Policy members have consistently maintained that rates are appropriate and unless we see the risks of deflation substantially increase a bottom may be in place at the current record low. Pound would set a fresh yearly high of 1.6746 before the final reading of 1Q GDP showed the lowest quarterly growth since 1958 of -2.4% down from -1.9%. The steeper than expected contraction dragged the annualized reading to -4.9% versus expectations of -4.3%. Total business investment in the country fell by 7.9% which was the most since September dimming the prospects for future growth. Meanwhile, Nationwide LLC showed that house prices rose 0.9% in June which helped support earlier bullish sentiment. The BoE’s success in their bond purchase program continues to raise optimism for the U.K. economy. The central banks aggressiveness in their monetary policy to start the year is starting to pay dividends which continue to provide sterling support. Our contention that we may be seeing the pound become overvalued was supported by the weak growth numbers including a 1.3% drop in household spending and exports falling for a fourth quarter by 6.9%.Japanese Yen Erased Earlier Losses and was seen trading at 95.83 and plummeted against their key counterparts as hopes of an economic recovery increased risk appetite to buy higher-yielding assets. Sentiment in Japan was helped by news that household spending in May rose 0.3% on year, up for the first time in 15 months, and beating expectations for a 1.5% decline But that was tempered by the release of the May jobless rate, which rose to 5.2%, the highest since September 2003, from 5.0% in April. Analysts had expected an increase of 5.1% for May

Euro and Pound rallied aginst the dollar on optimism in global shares-Jun 30.

Dollar weakened against the Euro as Asian stocks advanced on speculation the global recession is easing, damping demand for the U.S. currency as a refuge.Dollar weakened against the Pound on optimism the global slump is waning, reducing the U.S. currency’s appeal as a refuge. Confidence among U.S. consumers rose to 55.3 .The Conference Board will release the sentiment index at 10 a.m. in Washington

Technical View:
EURO is expected to be on a bull note and trade in the range of 1.4050-1.4150 levels. With good support seen at 1.3980 and key resistance is seen at 1.4205 levels. Momentum and stochastic are seen trending up and the currency is also seen trading above the moving averages confirming the bull note but certain amount of profit booking is expected at 1.4150 levels and if able to sustain above this level then it may extent its rally to the resistance.

GBP chart pattern shows a upper break of the flag pattern to test the immediate resistance level of 1.6680 and 1.6700 levels .Good support is seen at 1.6480.Momentum and stochastic indicators are pointing towards bull rally but caution required as market is in overbought areas giving possibility of reversal.

Rupee in choppy trade-Jun 30.

Indian rupee appreciated to a two-week high against the dollar in early trade on expectations of increased capital inflows by foreign funds following firm Asian stock markets. US data had a weak tone as Chicago Fed activity weaker than previous and Dallas Fed manufacturing weaker than market expectations. Despite this the S&P500 opened strongly and held onto the gains through the session, up 1.0% near the close. Quarter end window dressing seemed to be the main factor behind the strength.USDINR chart pattern shows a range bound move between 47.70-48.08 levels for the day. Good support is seen at 47.65 and key resistance at 48.12 levels .Currency is trading below the moving average level and stochastic is also seen trending down hinting towards the possibility of small downward correction.

Evening Report-Jun 29.

The Indian rupee erased gains after rising to its highest in more than a week and closed at 49. 10 on customary month-end dollar demand from refiners.The dollar has remained supportive as China’s central bank chief Zhou Xiaochuan said his country’s foreign exchange reserve policy is "quite stable" , which was a reversal from previous calls for a super sovereign currency. A relatively empty calendar could leave price action at the mercy of the broader themes which could include a pull back in risk appetite. A shortened holiday week could see light volume which may lead to choppy price action especially ahead of the unusual Thursday employment report. The economy is expected to have lost another 350K jobs which may disappoint market participants that were expecting continued improvement. The Euro has started to see choppy price action after initial weakness on broad based dollar strength. An improvement in Euro-zone economic confidence to 73.3 from 69.3-the highest since November- led to a brief bout in bullish sentiment. There was a broad based increase in optimism in the region with consumer confidence improving as well to -25 from -30. The improving sentiment is starting to translate into greater domestic demand, evidenced by the increase in June’s Bloomberg retail indicator to 47.5 from 47.1. There have been signs that the European economy is improving but will it be enough to keep the ECB on hold at this week’s policy meeting. The OECD last week called for the central bank to cut interest rates immediately but that was in stark contrast from the rhetoric from policy makers. Several committee members including President Trichet stated that current interest rate were appropriate signaling that the current %1.00 could be the end of their easing policy.The Pound has seen choppy price action starting with an earlier spike that was driven by a pick up in risk appetite. Higher European equity markets and U.S. futures paring earlier loses helped spark sterling bullish sentiment, before a less than impressive lending report curbed enthusiasm. Mortgage approvals rising to 43.4K from 43.2K in May, was missed the 46.0K forecasted which raised concerns. A housing recovery remains a key to an economic recovery. Indeed, the Hometrack housing survey showed that prices remained flat in June which reinforced an earlier report from Rightmove which showed the first decline in five months. The stabilization of the housing sector is a key to a U.K. economic recovery and if we see it begin to stall as credit conditions remain challenging then it could start to weigh on the pound. Japanese Yen remained Range Bound as the Industrial production in Japan jumped 5.9 percent compared to the previous month but figures were lower than expectations for a 6.9 percent increase.Retail sales were flat, in line with forecasts after the 0.6 percent increase in the previous month.

Evening Report-Jun 25.

Rupee gave up some of its gains and closed at 48.59 after local stocks gave up earlier gains to turn negative.Dollar was mixed overnight as we have started to see it consolidate its gains from yesterday derived from the FOMC rate decision. The central bank squashed any ideas that they would add to their bond purchase program. Policy makers also continued their view that inflation would remain subdued for sometime, which should limit speculation about future rate hikes which could lead to a dollar neutral stance from investors. The final U.S. GDP reading for the fist quarter is due to cross the wires unchanged from the preliminary print of -5.7%. An upward revision would raise speculation for future growth for the U.S. economy and based on the bullish price action from yesterday we continues dollar support. An inline print would leave initial jobless claims as the main driver of price action on the economic calendar. A drop below the forecasted 600K could ease concerns that rising unemployment will limit any potential recovery and add to greenback bullish sentiment. Euro has started to consolidate its losses from yesterday despite a unexpected drop in April’s industrial new orders which fell for a ninth month by 1.0% versus expectations of 0.0%. Activity decline 35.5% from a year ago as the economy continues to be hurt by slumping global demand. Positive data from Italy which isn’t typically market moving, but considering the country was one of the first to fell the impact of the downturn could be a sign things are bottoming. A rise in exports by 0.5% in May turned a trade balance deficit into a surplus of 555.0 million. This translated into Italian business confidence rising to 98.5 which was the highest in eight months. A 2.4% drop in capital goods which includes new buildings and machinery led the decline in demand which could limit future economic growth. The lack of investment in new projects will make it difficult for companies to generate above average returns and will limit profits and hiring going forward. The OECD called for the ECB to cut rates as they see rising unemployment as a hindrance of future growth for the economy. We don’t expect the ECB to lower rates below 1.0% as they have insisted that it is the floor for their easing, which could limit the scope of the recovery for the 16-member union. Pound has come under pressure as dovish comments from BoE governor Mervyn King yesterday continues to impact price action. The central bank leader said that "I feel more uncertain now than ever. This is a pattern of recession that we've not seen since the 1930s," and that an economic recovery could still be a "long, hard slog" despite encouraging data recently. The yen fell the most in three weeks after the Federal Reserve signaled the recession is easing, damping demand for the Japanese currency as a refuge in favor of higher-yielding assets.

Yen Falls after FOMC-Jun 25.

Japanese Yen popped above 96 after the USD FOMC boost. Crosses were well supported during the day although weak stocks saw them finish roughly flat. Stock market losses are hurting the uptrend seen in the AUD/JPY which risks further pullback as investor optimism wanes. Looking ahead, June Nationwide Core CPI forecast at -1.2% y/y. Chart is expected to have a small bullish correction for the day . With the trading range between 95.60- 96.80 levels. Stochastic and Relative strength index are seen trending up .Currency is trading above the moving averages and momentum is also supporting the bull note. Good resistance at 97.10 levels and support is seen at 95.40 levels.

USD strength won over Cable and Euros-Jun 25.

Euro traded above 1.4100 as the Euro hit highs in Early Europe before falling as the USD was supported by a good Treasury auction and secondly by the FOMC comments excluding deflation talk. Stocks and Oil continue to underpin the Euro going forward. Looking ahead, April Industrial Orders are forecast at 0.0% vs. -0.8% previously. Sterling was well supported by investors but USD strength won in the end pushing the pair from 1.6600 to 1.6400 late in the US session. The lack of expansion in US Treasury Buying from the FED supported the dollar post FOMC. EUR/GBP slipped back under 0.8500.

Technical Outlook:

EURO chart pattern shows a neutral trend. Trading range for the day is expected to be between 1.3880-1.4080 levels for the day. With good support seen at 1.3850 and key resistance is seen at 1.4150.Stochastic is trending up but crossovers will confirm the trend. Momentum indicators are pointing down and is expected to test the support level before resuming the bullishness.

GBP chart pattern points a sideways to bullish move. Trading range for the day is expected to be between 1.6350-1.6530 levels for the day. Stochastic and the Relative strength index are seen trending up but momentum is seen trending down hinting that there will be a potential downward correction to 1.6350 levels .Currency is trading little above the moving average giving bullish crossover.

Rupee rose on account of foreign fund flows-Jun 25.

Rupee rose as gains in Asian stocks spurred foreign fund flows into local shares. U.S. Dollar continued to trade in a wide range with the market selling USD ahead of the FOMC only to buy them back after a less dovish than expected statement. Adding to USD strength was reports that the SNB was intervening on CHF through USD/CHF in a dramatic move yesterday. Weak stocks in the US let the USD keep most of the gains into the US close .Looking ahead, Weekly jobless claims are forecast at 600 vs. 608K previously. Also released, Final GDP Q1 forecast to remain at -5.7% q/q.

Technical View:

USDINR chart pattern is seen on a range bound move. If the currency is able to break 48.62 levels it will resume its bullishness to 48.82 levels .Currency it is trading on the moving averages remaining sideways .Good support is seen at the average level of 48.45 break below will take it to 48.32 levels for the day.

Evening Report-Jun 24.

The Rupee gained marginally but was still trading near one-month lows as the dollar lost ground against the global majors and shares continued to trade choppy.Indian Unit gave a low of 48.35 but shed some of its gains and closed at 48.51 levels for the day.U.S. durable goods orders are expected to have fallen by 0.9% in May after a 1.7% improvement the month prior. It would be the second decline in the last two months and a sign that companies remain cautious despite signs of a recovery. The biggest obstacle for a rebound in growth may be the psychological impact on businesses and consumers as they may remain tepid for sometime. Therefore, considering that prospect we could see dovish comments from Fed Chairman Bernanke after today’s policy decision. The FOMC is expected to keep the Feds Fund rate at 0%-0.25% as downside risks remain for the economy. A dour outlook from the central bank could spark risk aversion and dollar support. Conversely there are enough signs that a recovery is imminent with the rate of job losses slowing to 345K from 504K Euro has started to trade lower after the OECD’s call for an ECB rate cut but the single currency has resumed its bullish momentum. The international economic organization has forecasted that growth will contract by 4.8% and become flat for the economic union. Meanwhile, the Euro-Zone current account saw its deficit shrink from -7.0 to -5.9 billion as the tradable goods balance swung to a surplus. Also crossing the wires was mixed Italian data with consumer confidence rising to an 18 month high of 105.4, while retail sales unexpectedly fell by 0.4%. The Organization for Economic Cooperation and Development said that the central bank should lower rates toward zero and keep them there until the economy is revived. Pound rose to as high as 1.6596 as European equity markets followed Asia’s lead with a strong open. The sterling began to trade heavy after the OECD report but has started to regain its footing and is looking to test the intra-day high. The U.K. economy’s growth forecast was downgraded to -4.3% from -3.7% as the country’s housing slump continues to be a weighing factor. The 6/3 high of 1.665 remains as formidable resistance and although we could see a test of the level, a sharp reversal remains a possibility. Japanese yen weakened against higher-yielding currencies after the Organization for Economic Cooperation and Development forecast the world’s leading industrialized nations will expand next year.

Evening Report-Jun 23.

The Rupee gave up some of the losses and closed at 48.56 as the local share market recouped most of its losses on short covering. The dollar has started to give back some of its gains from the past two days despite the dimming outlook for a global recovery. Concerns that current valuations in equities aren’t justified if we see a mild recovery had sunk equity markets. However we have seen European indexes reverse losses as deep as 4% with the FTSE and DAX turning positive. U.S. existing home sales for May is due for release and the 4.82 million that is expected would be the highest. Although it is far from the ten year average of 5.83 it could be a sign the sector is stabilizing and may add to the renewed risk appetite. The Richmond Fed manufacturing reading is forecasted to be positive for a consecutive month with a reading of 5 which would be the highest since March 2008. Bullish potential exists for the dollar as uncertainty over the pace of the recovery remains and today’s weakness could be a buying opportunity. Euro quickly erased earlier losses at the beginning of European trading to trade above 1.3940 as equity markets reversed and improving fundamental data helped add to bullish sentiment. Stocks opened down over 2% across the board but a sharp reversal in risk appetite saw several of the major indices turn positive. Improvements in German Gfk consumer confidence to 2.9 from 2.6 and the French business confidence indicator to 75 from 73 showed that optimism continues to build. Adding to the bullish sentiment and signs the economy is stabilizing was a rise in Euro-zone PMI manufacturing to 42.4 from 40.7. However, an unexpected drop in PMI services to 44.5 from 44.8 and French consumer spending by 0.2% raised some red flags as risks remain to growth. President Trichet stated today that interest rates are currently appropriate and that the central bank is obliged to focus on price stability. A break of either bound could lead to a longer term trend in either direction. At this time we still favor a bearish bias with the single currency’s correlation to equity markets and the prevailing view that current prices aren’t supported by existing data. Pound continued to see choppy price action despite bullish comments from BoE chief economist Dale that initial signs were encouraging from quantitative easing efforts. Although, he would state that it is still too early to evaluate the full impact, but “The growth rate of underlying broad money has picked up in recent months,” and “it is likely that yields are lower than they would have been” for gilts. A rise in BBA loans for House purchase to 31K from 29K added to evidence that credit markets are thawing and beginning to normalize which should start to translate into future growth. However the sterling may have most of the expected improvement priced into the currency which increases its downside risks. U.S. currency also dropped versus the yen as the Federal Open Market Committee prepared to start a two-day rate- setting meeting today .JPY rose benefiting from creeping doubts about the sustainability of any economic recovery .Concerns about reserve diversification away from U.S. assets caused the dollar to turn lower against the Euro after Moody's said one risk to the U.S.' triple-A rating is if the dollar is challenged as the main reserve currency.

Evening Report-Jun 23.

The Rupee gave up some of the losses and closed at 48.56 as the local share market recouped most of its losses on short covering. The dollar has started to give back some of its gains from the past two days despite the dimming outlook for a global recovery. Concerns that current valuations in equities aren’t justified if we see a mild recovery had sunk equity markets. However we have seen European indexes reverse losses as deep as 4% with the FTSE and DAX turning positive. U.S. existing home sales for May is due for release and the 4.82 million that is expected would be the highest. Although it is far from the ten year average of 5.83 it could be a sign the sector is stabilizing and may add to the renewed risk appetite. The Richmond Fed manufacturing reading is forecasted to be positive for a consecutive month with a reading of 5 which would be the highest since March 2008. Bullish potential exists for the dollar as uncertainty over the pace of the recovery remains and today’s weakness could be a buying opportunity. Euro quickly erased earlier losses at the beginning of European trading to trade above 1.3940 as equity markets reversed and improving fundamental data helped add to bullish sentiment. Stocks opened down over 2% across the board but a sharp reversal in risk appetite saw several of the major indices turn positive. Improvements in German Gfk consumer confidence to 2.9 from 2.6 and the French business confidence indicator to 75 from 73 showed that optimism continues to build. Adding to the bullish sentiment and signs the economy is stabilizing was a rise in Euro-zone PMI manufacturing to 42.4 from 40.7. However, an unexpected drop in PMI services to 44.5 from 44.8 and French consumer spending by 0.2% raised some red flags as risks remain to growth. President Trichet stated today that interest rates are currently appropriate and that the central bank is obliged to focus on price stability. A break of either bound could lead to a longer term trend in either direction. At this time we still favor a bearish bias with the single currency’s correlation to equity markets and the prevailing view that current prices aren’t supported by existing data. Pound continued to see choppy price action despite bullish comments from BoE chief economist Dale that initial signs were encouraging from quantitative easing efforts. Although, he would state that it is still too early to evaluate the full impact, but “The growth rate of underlying broad money has picked up in recent months,” and “it is likely that yields are lower than they would have been” for gilts. A rise in BBA loans for House purchase to 31K from 29K added to evidence that credit markets are thawing and beginning to normalize which should start to translate into future growth. However the sterling may have most of the expected improvement priced into the currency which increases its downside risks. U.S. currency also dropped versus the yen as the Federal Open Market Committee prepared to start a two-day rate- setting meeting today .JPY rose benefiting from creeping doubts about the sustainability of any economic recovery .Concerns about reserve diversification away from U.S. assets caused the dollar to turn lower against the Euro after Moody's said one risk to the U.S.' triple-A rating is if the dollar is challenged as the main reserve currency.

Yen gained as Asian Stocks slumped-Jun 23.

Yen strengthened as Asian stocks slumped on concern the global recession will be prolonged, spurring demand for the relative safety of Japan’s currency. currency gained on speculation -that U.S. report tomorrow may show durable-goods orders declined. chart is expected to have a bearish correction for the day . With the trading range between 94.60- 95.40 levels. Stochastic and Relative strength index are seen trending down giving bearish crossovers .Currency is trading below the moving averages giving bearish crossover. Good resistance at 96.00 levels and support is seen at 94.20 levels.

Euro and Pound fell on USD strength-Jun 23.

Euro will probably extend its decline against the dollar as it approaches an intersection with an area of support. The Pound fell against the dollar as U.K. home sellers lowered asking prices in June for the first time in five months and stock-market losses sapped demand for riskier assets priced in sterling.

Technical View:

EURO chart pattern holds on its bear note to take support at 1.3790 levels break of which will have further bearish momentum towards 1.3730. Currency is expected to trade in the range of 1.3790 -1.3930 levels. Currency is trading below the moving averages confirming the bear note. Stochastic is also trending down.

GBP chart pattern points a sideways to bearish move. Trading range for the day is expected to be between 1.6200-1.6450 levels for the day. Stochastic and the Relative strength index are seen trending down currency is trapped in triangle area. A breakdown from the triangle should trigger further bearish momentum targeting 1.6180 area and Break above that should trigger further bullish momentum back towards 1.6505/59 area..

Rupee had a higher open racking weaker stocks-Jun 23.

Rupee reached a five-week low as local shares fell following the lead from Asian stocks, triggering concerns of foreign fund outflows. US Dollar strength looks to be gaining momentum of major forex currencies as the greenback again becomes attractive as a safety play amid reversing stock and commodity markets.

Technical Outlook:

USDINR chart pattern gave a higher open and is expected to resume its bullishness and test the resistance level of 48.97 and as the market is seen trading in the overbought areas it is expected to give a downward consolidation after the Europe open to 48.66 levels next support for the currency is seen at 48.40.Chart pattern is expected to have a doji formation for the day .

Evening Report-Jun 22

Indian rupee extended downtrend against the dollar and closed at 48.62 levels during deals in India as a drop in local stocks weakened the currency. Indian stocks ended near day's lows today as traders booked profits across the board ahead of June series of F&O expiry. Negative European markets also kept the markets under pressure .An empty U.S. calendar could see the dollar take its cue from equity markets today as risk sentiment continues to be a driving force of price action. The World Bank cutting its growth forecast has markets lower in Europe and U.S. futures pointing at a lower open. The global agency cut its GDP forecast to -2.9% from -1.7% stating that a recovery will be subdued compared to a normal scenario. Therefore, we may see the greenback continue to find support heading into the U.S. session and going forward as the outlook for a robust recovery dims. Euro has started to consolidate earlier losses after the German IFO report showed an improvement in business sentiment for the third straight month. The German IFO business climate reading in June rose for a third month to 85.9 from 84.3 signaling that the economy may have bottomed. Economists forecasted an improvement to 85.0, but a jump in expectations to 89.5 from 85.9 help offset a slight decline in the current assessment to 82.4 from 82.5. The single currency fell sharply before the release on comments from ECB member Nowotny that the central bank would most likely leave interest rates unchanged until 2010 erasing speculation of a rate hike. The central bank’s mandate of price stability has led to many traders predicting that they would be the first to start tightening once growth signs emerged. The higher interest rate expectations have provided support for the Euro and with them removed; we could see continued weakness from the single currency. However, an improvement in business sentiment and continuing signs of a recovery could continue to remain a supportive factor and limit the downside risks. Pound has seen whipsaw price action after a 0.4% drop in home prices according to Rightmove LLC led to initial weakness. It was the first drop in five months which may be a sign that demand is waning as bargain hunting ends. The current triangle formation appears to be completing which could lead to a breakout, and with the dimming outlook for a global recovery downside risks may be the greatest .Japanese Yen strengthens as Pessimism about the economy among Japan's big manufacturers lessened notably in the second quarter. The business confidence index for large manufacturing companies rose to minus 13.2 in the second quarter from a record low of minus 66 in the first quarter. Gauge for non-manufacturers' confidence stood at minus 27.8 up from previous quarter's minus 42.6. Hence the index for all industrial confidence improved to minus 22.4 from minus 51.3.

Evening Report-Jun 19.

Rupee edged a little lower as the domestic shares pared earlier gains but the weakness in the dollar versus major currencies helped prevent a further fall. The U.S. dollar continued to lose ground during the overnight following the rebound in risk appetite, and the greenback may trend lower over the next few hours of trade as the equity futures foreshadows a higher open for the U.S. market. The advance in global equities is likely to fuel demands for higher risk/reward investments, and the lack of event risk coming from the economic docket could leave the greenback at the mercy of risk trends. The Euro failed to break above 1.3950 with the single-currency tipping lower throughout the European trade to hold near 1.3910 due to lack of momentum to retrace the decline from earlier this week may keep the pair within a tight range over the remainder of the trading session. Meanwhile, the economic docket continued to reinforce a weakening outlook for the region, with German producer prices falling to a 22-year low in May from the previous year. Producer prices in Germany held flat with the annualized rate falling 3.6% from the previous year, driven by a 47.4% drop in heating oil, while excluding energy costs, prices slipped 2.5% from a year earlier. Meanwhile, EU policymakers said that the economy is well on track for ‘sustainable’ recovery,’ and went onto say that ‘further budgetary stimulus would not be warranted.’ The group also called for a ‘creditable exit strategy’ in order to stem the long-term risks for inflation, while they pledged to support the banking industry as financial conditions remain challenging. Nevertheless, as ECB expects economic activity to stabilize later in the year, hopes of a marked recovery may continue to drive the single-currency higher as the central bank puts a floor on the exchange rate. British pound advanced to a high of 1.6451 on the back of U.S. dollar weakness , and the pair may continue to push higher as investors hold long-term expectations for higher interest rates in the U.K. Meanwhile, BoE Governor said that there have been signs that the downturn in the economy was leveling off, but warned ‘strong conclusions’ should not be drawn as he expects economic confidence to ‘take a lot longer to recover.’ The comments suggests that the outlook for future growth remains uncertain as the region faces its worst recession in over half a century, and the rise in commodity prices may continue to take a toll on the real economy has consumers face a weakening labor market paired with the downturn in the housing market .Japaneses Yen remained bullish and was seen at 96.80 levels.

Evening Report-Jun 18.

Rupee closed at 48.21 levels for the day and faced a resistance at 48.32 levels. India's inflation rate for the week entered into negative territory for the first time giving ample scope for the government to allot more funds in the next month's Budget to boost economic growth. India's Advance Tax Collection also Rises During Apr- Jun Period. After earlier losses the dollar has regained its footing and is benefiting from increased risk aversion on the back of weak U.K. consumption figures. We may see continued greenback support as markets start to come to the reality that any recovery will be prolonged and challenging. On the US economic docket we will see focus on the upcoming initial jobless claims figures as traders look for signs that the labor market is improving. Forecasts are for new filings to remain level at 602k after 601k the month prior as the pace of layoffs has slowed. A drop below the 600K level could spark an improvement in risk sentiment and weigh on the dollar. Additionally, the Philadelphia Fed manufacturing reading is forecasted to improve to -17.0 from -22.6 which would be the highest since September, 2008. The Euro has seen see saw price action during European trading as bullish sentiment is being challenged by declining equity markets. The Italian trade balance was the only fundamental release which showed a deficit of 277 billion euros after a surplus of 69 billion the month prior as exports sharply fell. Despite, signs of stabilization in the economic union there are several countries that are still facing considerable challenges. Indeed, the German economic Ministry June report stated that the contraction is weaker than previously and expects a bottoming by the end of 2009 but downside risk remain high. The Pound sunk nearly 100 pips immediately after the disappointing release of U.K. May retail sales which unexpectedly fell by 0.6%. Early forecasts were looking for a 0.3% gain which would have been a third straight month of improvement, but months of job losses made it difficult for Britons to sustain the level of demand. However, public sector net borrowing rose to £19.8 billion which was the highest since record keeping began in 1993 and a sign credit markets are thawing. A reversal in consumption at non-food and non-specialized stores which fell by -1.4% and -1.8%, signals that Britons have reigned in non-discretionary spending. Signs of stabilization in the economy had led to gains the past two months but now that the built up demand has been exhausted, future purchases will come under scrutiny. Meanwhile calls for spending to be curbed by Chancellor of the Exchequer Alistair Darling will put added pressure on Prime Minister Gordon Brown as the government continues to increase its debt in an attempt to spur an economic recovery. Also BoE Governor King speaking today said that although that there a signs of a recovery, it is too soon to reverse stimulus and liquidity measures but the time has come to plan an exit strategy. Japanese Yen remained under downside pressure and was capped below 96 zone.

Evening Report-Jun 17.

Indian rupee remained lower against the US dollar and closed at 48.14 levels based on the dollar's gains versus the majors .Local stock market fell 3.2 percent as renewed worries about the world economy weighed on markets across Asia and Europe. Dollar started to regain some support as concerns over the type of recovery for the global economy has reignited a move toward safety. U.S. consumer prices are forecasted to decline by 0.9% from a year ago as oil prices are lower by 50% despite their recent rise. An inline print will ease some of the recent concerns that the upside risks of inflation are increasing as the central bank continues to print money. Fears are growing that the Fed may need to start tightening monetary policy sooner than their projection of mid 2010 which could limit the scope of a recovery. Either the prospect of rising interest rates or a slower recovery could generate bullish dollar sentiment. However an inline print will confirm that current policy is appropriate and will lower interest rate expectations which could send the dollar lower. The Euro saw a similar reversal as sterling after reaching as high as 1.3926 as it was also a victim of global growth concerns. A rise in construction activity for a second month by 0.6% in April added to the signs that the economy is stabilizing. Meanwhile the trade balance for April saw its surplus increase to 2.7B from 1.8B, despite expectations for a deficit of 1.5B. The decline in imports outpaced a slowdown in exports as local demand remains weak. The region may start to see a pickup in demand for its products as global demand improves but domestic growth may be slow to recover which could limit the scope of a possible recovery. The Pound has started to trade heavy after reaching as high as 1.6483 despite a slower pace of job losses and an improving outlook from the BoE. Indeed. the U.K. economy lost 39,300 jobs in May which was far less than the 60,000 that was expected. The minutes from the last policy meeting of the BoE showed that they are becoming optimistic that a recovery is imminent. The central bank points to signs that the housing market is stabilizing and a slowing of the decline in consumer consumption. The slower pace of job losses will also help lead to a recovery in domestic growth and without the threat of falling home prices we could see the U.K. economy take steps toward a recovery. However, there remain concerns over the amount of debt that the government has issued to help finance the stimulus package and bailout of financial institutions. The expectations of higher taxation going forward will limit the upside for the economy and may cap the pound’s potential appreciation. BoE governor King and Chancellor Alistair Darling will make their Mansion House speeches and if we hear talk of an exit strategy from their quantitative easing efforts, then it could add on to bullish sentiment in sterling. Yen may strengthen against higher-yielding currencies as the Standard & Poor’s 500 Index fell. Currency gained as the greenback remained under pressure as the official of BRIC economies ponder over its status as a reserve currency.

Evening Report-Jun 16

The Indian rupee was largely steady in afternoon trade and closed at 47.74 as a choppy sharemarket failed to provide clarity on fund flows, but a weaker dollar overseas supported sentiment for the local unit.Greenback The dollar fell broadly on Tuesday after traders took comments from Russia that the world needs new reserve currencies as a signal that it may be looking to cut the share of U.S. assets in its currency portfolio. The Dollar has given back some of its gains as the outlook for the global economy received a boost from the BoJ and there was more talk of replacing the dollar as the world reserve. Russian President Dmitry Medvedev's reiterated previous rhetoric from the country that an alternative needs to be developed to the greenback, reversing comments from the country’s Finance Minister yesterday. The remarks came ahead of the BRIC conference where it is expected that the emerging market economies will discus diversifying away from the dollar. The economic docket may add to dollar weakness as producer prices are forecasted to fall by 4.4% after a 3.7% drop in April. Lower inflation pressure will allow the Fed to continue its quantitative easing measures and leave rates near zero. Yet, there has been talk that the central bank will need to start tightening to avoid future inflation risks, so a slower rate of decline than expected could spark bullish greenback sentiment. Also scheduled for release are housing starts which are forecasted to rise to 485,000 from 458,000 which could fuel risk appetite and add to the bearish dollar momentum. The Euro reached as high as 1.3930 as a jump in German investor sentiment rose to a three year high of 44.8 adding to the improving global outlook. Signs that the region’s economy is stabilizing lead to sentiment rising from 31.1 and exceed forecasts of 35.0. Meanwhile, Euro-zone CPI fell to 0.0% as the contraction in the economy and the prior drop in energy costs continue to put downward pressure on prices. However rising energy costs and the economy stabilizing have eased deflation fears which have allowed the ECB to bring their benchmark rate to a record low of 1.00%. Despite the Euro ‘s gains against the dollar it has fallen to its lowest level since December, 2008 against the pound at 0.8439 as there is still lingering concerns over the capitalization of the region’s banks and their lack of transparency. The Pound rose to as high as 1.6483 as it reversed earlier losses on an improving global outlook and a slower pace of decline for inflation. Indeed, U.K. CPI fell to 2.2% from 2.3% but missed expectations of 2.0% which is the BoE’s target level. The central bank has forecasted that inflation will fall below their desired level and remain there until 2010. However, improving global and domestic economies have started to raise inflation concerns and may limit the scope of future quantitative easing efforts from the central bank and the interest rate outlook. Japanaese Yen gained and was seen at 96.90 levels as BoJ left their benchmark rate at 0.10% and in a statement said that "Japan’s economic conditions, after deteriorating significantly, have begun to stop worsening." The central banks raised its outlook for the economy for a second month which sent the Yen soaring 190 pips against the dollar to a low of 96.07. Despite, the improved outlook, BoJ Governor Masaaki Shirakawa said that there was no guarantee that a recovery could be sustained.

Yen Advances as Stock Losses Increase Demand for Safety Assets -Jun 16.

Japanese Yen initially found support from USD strength until mounting stock market losses forced the pair back below 98 Yen. Crosses were under severe pressure with AUD/JPY falling from 80 to 77.5 Yen. Looking ahead for BOJ minutes released Tuesday. chart is expected to have a bearish correction for the day . With the trading range between 96.40- 97.40 levels. Stochastic and Relative strength index are seen trending down giving bearish crossovers .Currency is trading on the moving averages break below it will confirm the trend. Good resistance at 97.80 levels and support is seen at 96.20 levels.

Euro and Sterling could not stand USD strength-Jun 16.

Euro continued with Friday’s theme of a slow trend lower. The Pair fell from 1.4000 to test support at 1.3790 before bouncing off 1.3750. Numerous negative Euro stories flooded the market yesterday which combined with stock weakness for a substantial move. Looking ahead for German Zew Survey(Economic Sentiment) for June forecast to rise to 35 from 31 previously. Sterling held up better than most but succumbed to USD strength. EUR/GBP broke through 0.8500 and supported during the day. A CBI report expects the UK economy to not rebound until 2010 and that expansion of the Quantitative easing program will be required. Looking ahead for May CPI is forecast at 0.3% vs. 0.2% previously.

Technical view:

EURO chart pattern shows a bearish note for the day. Currency is expected to trade in the range of 1.3720-1.3970 levels. Momentum is seen trending down and Parabolic is holding on the bear note and Euro is trading below the moving average confirming the outlook..Good support is seen at 1.3670 and break of which will see 1.3420 levels in near term and key resistance is seen at1.4020 levels.

GBP chart pattern points towards a sideways to bearish note and trade in the range of 1.6150-1.6380 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down Currency is giving downward consolidation after testing the upper bollingers hinting towards downward correction to 1.5950 .Key resistance for the currency is seen at 1.6430 levels. Caution is given by parabolic as is is pointing towards bull note.

Rupee weakend with weaker Asian shares -Jun 16.

The Indian rupee held close to three-week lows with weaker Asian shares weighing on sentiment, but the dollar's losses versus major currencies helped prevent a further sharp drop. U.S. Dollar enjoyed gains all day as the Euro led the majors lower. Oil came off 2% along with Gold and Copper. Stocks were also hit hard by profit taking and helped stoke safe haven buying. TIC long term purchases fell to $11Bn in April. Crude Oil closed down $1.43 to finish the day at $70.61.. Looking ahead, May Housing Starts are forecast at 0.49M vs. 0.45M previously.

Technical View:

USDINR chart pattern shows a bullish note for the day. With the trading range between 47.55-48.00 levels for the day. Good support is seen at 47.42 levels and key resistance is seen at 48.10 levels. Currency is expected to have a downward correction and test moving average level as support. Stochastic is trending down from overbought areas hinting towards small downside correction.

Evening Report -Jun 15.

Rupee stayed week and closed at 47.72 in tandem with the domestic share market .The dollar's gains against major currencies overseas also weighing on sentiment.The dollar was well bid after the supportive comments from Russian finance minister, but we are starting to see gains become harder to come by in recent activity. Manufacturing in the New York area is expected to have weakened to -4.80 from -4.55 after consecutive months of significant improvement which could add to current risk aversion and dollar support. U.S. Dow futures are lower by triple digits which is a strong sign that we may see equities trade lower which could add to bullish dollar sentiment. Meanwhile turmoil in Iran has raised geopolitical concerns which could also send traders looking for the safe-haven of the greenback. The Euro sunk after Russian Finance minister Alexei Kudrin confirmed that the dollar had no rival as the world reserve at the moment. The comments came in the midst of the G-8 meeting and calmed fears that this week’s BRIC summit would see calls for finding an alternative to the dollar. The summit of global leaders also saw questions raised regarding the European banking system which is also helping weigh on the euro. The unwillingness of governments to provide bank stress test similar to the U.S. has left many wondering if they have enough capital to meet the challenges ahead. Meanwhile, Euro-zone 1Q unemployment fell by 0.8% which was the biggest quarterly drop on record and may add to the single currency’s weakness. Markets started to hedge their bets that the Euro would be seen as a substitute for the dollar as a reserve currency which helped spur some of the recent greenback weakness. Russia has been the biggest proponent of removing the dollar of its world reserve status and now that it has confirmed its dominance we could see more reversal of flows as we head into the U.S. session.After being caught up in the Euro weakness the pound has started to regain its footing. Markets continue to see sterling weakness as equity markets are trading lower across the globe and the risk aversion could be a weighing factor throughout the day. There weren’t any fundamental release to influence price action which will leave it at the mercy of the broader themes. However this won’t be the case for the remainder of the week as CPI, BoE minutes and retail sales line the economic docket. The G-8 meeting showed that policy makers are starting to become concerned with the longer –term effects of the amount of liquidity that is being pumped into financial systems. The sterling could find support as the BoE was one of the first to take aggressive steps to infuse markets with needed funds and may lead the charge to undo its effects. However, the Confederation of British Industry said that the central bank may need to print more money in order to ensure a recovery as they see growth flattening after a brief recovery. Japanese Yen picked up bullish momemtum and stayed above 98 levels ,Currency faced strong resistance at 98.60 levels.

Euro and pound bulls are hammered-Jun 15.

Euro was very soft against the USD as the market hammered the Euro on the subject of reserve status. As the second biggest currency any talk of moves away from the Dollar standard will help the single currency advance. Russia and Japan both talked up the USD .Looking ahead for Q1 Employment change Q/Q previously at -0.3%. Sterling weakened from the 1.6500 level as GBP/JPY ran out of steam. The Blackrock $6bn purchase of Barclay’s global investment unit has been supporting the pound in recent trading sessions. EUR/GBP tested 0.8500 but couldn’t press further.

Technical View:

EURO chart pattern is expected to be on a bearish note for the day. Currency is expected to trade in the range of 1.3860-1.4070 levels. Momentum is seen trending down and Parabolic is holding on the bear note and Euro is trading below the moving average confirming the outlook..Good support is seen at 1.3820 and key resistance is seen at1.4120 levels.

GBP chart pattern shows a bearish note and trade in the range of 1.6230-1.6480 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards downward correction to 1.6180 .Key resistance for the currency is seen at 1.6520 levels. Caution is given by parabolic as is is pointing towards bull note.

Rupee weakens on Asian cues-Jun 15.

The Rupee depreciated against the dollar taking cue from weak Asian currencies and expectations of capital outflow by foreign funds in the domestic equities which opened on a negative note. U.S. Dollar the market took the cue of global Finance ministers who talked up the dollar on Friday and prompted profit taking form Oil to Gold. Crude Oil closed down $0.64 to finish the day at $72.04. US Consumer Confidence continues to edge higher up to 69 in June vs. 68.7 previously. Looking ahead for April Capital Net flows previously at 55.8bn.

Technical view:
USDINR chart pattern shows a bullish note for the day. With the trading range between 47.55-47.95 levels for the day. Good support is seen at 47.42 levels and key resistance is seen at 48.05 levels. Currency is expected to test the resistance level and turn down to moving average levels as Stochastic is trending up but seen in overbought areas hinting towards small downside correction and the currency is seen trading above the moving average.

Evening Report-Jun 12.

The Rupee has surged and closed at 47.59 as cash floods into India as investors turn optimistic on the global outlook but as authorities are trying to temper the rise so it does not disrupt an emerging economic pick-up. The Dollar has been well bid through overnight trading across the board as Japanese Finance Minister Kaoru Yosano said his nation’s confidence in U.S. debt is "unshakable" and that the currency’s global status is safe. Despite rhetoric from countries such as Russia calling for the end of the dollar as the world reserve, the safety and liquidity of U.S. Treasuries will make it difficult for them to find an adequate substitute at this time. It will take a conscious global effort to achieve this and given the rate that initiatives of that magnitude take, it could be sometime before we see a suitable alternative developed. Meanwhile, the University of Michigan consumer confidence survey will provide the only significant event risk for the day as it is forecasted to improve to 69.5 from 68.7 which would be the highest since last September. It has been rising optimism which has bolstered demand for risky assets and another uptick in consumer sentiment should add to the theme. Therefore, we could see greenback weakness on the pick up in risk appetite as traders look to buy assets that will benefit from an increase in domestic demand . However, we must continue to monitor that relationship as we go forward and be aware that positive fundamental data will begin to generate bullish dollar price action. The Euro traded heavy throughout overnight trading reaching as low as weak fundamental data add to a pull back in risk appetite. Indeed, industrial production for the Euro-zone fell by 1.9% in April which was far greater than the -0.4% which was expected. The monthly decline dragged the annualized rate to -21.6% which was the most on record. Meanwhile, prices continue to fall in the region as French CPI turned negative for the first time since record keeping began in 1996 with a -0.3% Y/Y reading. The German wholesale price index added to the story as it dropped by 8.9% which was the most in 22 years. The ECB has forecasted that inflation will turn negative for the region over the coming months but will start to move back toward its 2% target by the end of the year. A look at the breakdown for the region’s output shows that a 4.0% reduction in energy led the decline followed by a 2.7% fall in capital goods. We could see the energy numbers reverse as rising oi prices will begin to inspire producers to take advantage of potential rising profits. However, the drop in capital goods will weigh on any hopes for a rapid recovery for the economic union. Also, a 26.7% reduction in durable consumer goods on a yearly basis underlines the depth of the retrenchment by consumers and we may not see prior levels of consumption return for sometime. Sterling has started to see some profit taking after reaching as high as 1.6600as bulls recognizing the broader dollar strength gave up the fight for the time being. BoE committee member Paul Fisher acknowledged that the U.K. is seeing signs of recovery but policymakers shouldn’t become complacent as there are likely to be bumps in the road ahead, with many twists and turns. Nevertheless, the quantitative easing measures by the government continued to boost liquidity in the markets which is helping the housing sector recover and leading to a pick up ion output. Greenback strengthened in early dealings versus the Japanese Yen and hit as high as 98.28 as industrial production grew 5.9% month-on-month in April, revised up from the preliminary estimate of 5.2%. On a yearly basis, production plunged 30.7% in April. Japan's consumer confidence improved to 36.3 in May from 33.2 logged in the previous month.

Pound advanced compared to Euro-Jun 12.

Euro broke above 1.4200 during the US session after bouts of USD strength earlier in the day. Heavy EUR/JPY buying helped to support the major higher. Looking ahead, April Industrial Production is forecast at -0.4% vs. -2% previously.Sterling rallied with the higher stocks/Oil theme. The pair managed to break above 1.6600 before consolidating for the rest of the day.

Technical Outlook:

EURO chart pattern is expected to be on a bearish note for the day. Currency is expected to trade in the range of 1.3980-1.4170 levels. Momentum is seen trending down and Parabolic is holding on the bear note and Euro is trading on the moving average only break on either sides will confirm the outlook..Good support is seen at 1.3950 break of which will see 1.3880 and key resistance is seen at1.4220 levels.

GBP chart pattern shows sideways to bearish note and trade in the range of 1.6430-1.6650 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards upward correction to 1.6680 .Key support for the currency is seen at 1.6350 and 1.6280 levels. Caution is given by parabolic as is is pointing towards bull note.

Indian rupee edged higher -Jun 12.

Indian rupee edged higher following gains in other Asian currencies. U.S. Dollar came under pressure across the board as a jump in shares helped increase risk appetite. May Retail Sales rose 0.5% vs. 0.6% forecast. Commodities also rallied with Oil jumping to $73 a barrel after the IEA raised its world Oil demand forecast. Weekly jobless claims fell 24k to 601k this week. Crude Oil closed up $11.35 to finish the day at $72.68.Looking ahead, G8 Finance minister meet over the weekend.

Technical Outlook:

USDINR chart pattern shows sideways to bullish note for the day. With the trading range between 47.30-47.75 levels for the day. Good support is seen at 47.25 levels and key resistance is seen at 47.82 levels. Currency is expected to test the resistance level and turn down to lower band levels as Stochastic is trending down hinting towards small downside correction and the currency is seen trading on the moving averages giving a sideways outlook.

Evening Report-Jun 11.

Indian rupee extended its downtrend against the dollar and closed at 47.61 levels , the India's annual rate of inflation rose to 0.13% Stock market ended a volatile session modestly lower.The dollar has given back its recent gains against most the major currencies as improving fundamentals across the globe has spurred hope that the broader economy has stabilized. The upcoming advance U.S. retail sales report is expected to keep the theme going as consumption is forecasted to rise by 0.5% in May. The U.S. consumer confidence indicator jumped the most in six years to 54.9 from 40.8 last month as rising equity markets and stabilizing house prices have eased fears which should support an increase in demand. Markets will be looking to see what the reaction will be from the greenback on the positive fundamental data. Additionally initial jobless claims are forecasted to fall to 615,000 from 621,000 but a sharper drop would reinforce the U.S. labor report and could add to rising optimism. An auction of 30 year U.S. treasury bonds may add support for the dollar today and should be factored into strategies for today. Concerns are rising that increasing yields could start to derail the potential recovery.The Euro has remained choppy through overnight trading and the ECB’s monthly bulletin didn’t help generate any conviction for either direction. The Central Bank said the Euro-zone economy will start growing again by the middle of next year and inflation will pick up after temporarily dipping into negative territory this summer, which was nothing that they haven’t already stated. Meanwhile, French non-farm payrolls showed further deterioration in the labor market as its initial reading for the first quarter was revised lower to -1.2% from -0.9%. The weak labor data only supports the arguments that growth will not return to the area until next year. The sterling continued to find support reaching as high as 1.6490 after a BoE survey showed that consumer expectations for inflation rose to 2.4% from 2.1% for the next 12 months. Additionally, the NIESR GDP estimate showed that the rate of contraction for the economy has slowed in the three months ending in May to -0.9% from -1.5% in the period ending in April. The stabilizing economy and rising commodity prices have fueled expectations for rising costs and ultimately higher interest rates from the central bank. The major central banks expressed when they embarked on their monetary easing policies that the risk of future inflation would leave them ready to reverse their actions and look to remove liquidity from the markets. Policy makers are concerned that the risks of future bubbles exist, if they don’t manage the process in a timely manner. Therefore, we are starting to see interest rate expectations rise in the U.S. and U.K. as evidence mounts that growth is around the corner. Therefore, rhetoric from policy makers will start to have a greater impact on price action and bears watching as we go forward. Yet, we don’t expect any change in policy until we start to see concrete signs of growth which may not come until early 2010.Japanese yen edged down earlier in Asian deals after a report showed that Japan's economy shrank in the first quarter at its fastest pace since World War Two.The gross domestic product in Japan contracted by 3.8 percent in the first quarter compared to the previous three months.Japanese yen bounced back in European trade to 98.26 levels.

Japanese yen higher against dollar-Jun11.

Japanese Yen weakened through the USD/JPY which rallied off support at 97 Yen to break back above 98. Crosses were mixed with year highs in AUD/JPY leading to profit taking in the US session. Japan Q1 GDP at -3.8% vs. -4.0% forecast. chart is expected to have a bearish correction for the day . With the trading range between 97.20- 98.40 levels. Stochastic and Relative strength index are seen trending down giving bearish crossovers . currency is trading below moving averages. Good resistance at 98.60 levels and support is seen at 96.80 levels.

Euro paused below 1.4100 levels but pound saw a bull rally-Jun 11.

Euro tried to rally as the Nikkei surged towards 10000. Sluggish US stocks and a Financial Times article on European banks hurt sentiment and the pair slipped below 1.4000. Sterling rallied aggressively in European session on better than expected manufacturing and Industrial production figures in April. April Trade Balance at -7.0Bn vs. -6.4Bn forecast.

Technical Outlook:

EURO chart pattern is expected to be on a bullish note for the day. Currency is expected to trade in the range of 1.3920-1.4130 levels. Momentum is seen trending down and Parabolic is holding on the bear note but stochastic is pointing up and Euro is trading between the fast and slow moving average giving a sideways outlook .Good support is seen at 1.3880 and key resistance is seen at1.4180 levels .

GBP chart pattern is expected to form a bullish pattern and trade in the range of 1.6320-1.6520 levels for the day. Momentum is seen trending up and the Relative strength index is also trending up hinting towards upward correction to 1.6550 .Key support for the currency is seen at 1.6280 levels. Caution is given by parabolic as it is holding on to its bear note.

Indian Rupee weakened on global cues-Jun 11.

The Indian rupee weakened mirroring losses in other regional peers and weighed by rising oil prices and choppy local shares. U.S. Dollar managed to end slightly higher after rebounding off lows set in the European session. A good US treasury Auction helped the USD gain for the rest of the day. US stocks couldn’t manage the optimism seen in Asia and Europe although higher Oil continues to support mining stocks. April‘s Trade Balance came in at expectations of -29.2B. Looking ahead for Retail Sales are forecast at 0.5% vs. -0.4% previously.

Technical Outlook:

USDINR chart pattern shows sideways to bullish note for the day. With the trading range between 47.20-47.60 levels for the day. Good support is seen at 47.18 levels and key resistance is seen at 47.65 levels. Stochastic is trending up giving bullish signal but the currency is seen trading on the moving averages giving a sideways outlook.

Evening Report-Jun 10.

Indian Rupee was largely steady rising for the second straight day, as a firm stock market renewed hopes for more inflows and the dollar's weakness versus majors also supported.The dollar continues to be on the run as demand for equities and commodities continue to plague the greenback. Event risk today will come in the form of the trade balance, monthly budget statement and the Fed Beige book report. The U.S. trade deficit is expected to widen to $29.0 billion from $27.6 billion as consumer demand starts to improve as the economy stabilizes. Meanwhile, traders will be closely watching to see if government spending is on a decline after the Obama administration has pledged significant cost cutting in an attempt the trim the deficit in half by the end of the President’s term. Fears are growing that if the government cuts spending drastically it may slow the recovery process for the economy. The biggest threat to the dollar may come from the Fed Beige book as the forward looking indicator will show how the 12 federal districts are performing and the expectations for the various regions. It typically generates a reaction from equity markets which could impact dollar price action. The Euro has also come under pressure after reaching as high as 1.4143 during overnight trading as we have started to see some profit taking. There was mixed data from the Euro-zone as French industrial production unexpectedly fell by 1.4% versus expectations if a 0.2% gain. Growth remains a challenge for the country as the Euro-zone finds itself in the worst recession since WWII. Meanwhile, Italian output rose by 1.1% which was more than the 0.8% that economists forecasted and the highest in a year. However, it ended 11 straight months of contraction. Indeed, growth figures for the country showed that the economy contracted by 2.6% in the first quarter as global demand has shrunk for Italian goods. The Pound has started to give back some of its gains after reaching as high as 1.6443 following the release of the U.K. trade balance report and manufacturing numbers. Output in the U.K. rose for a second month by 0.3% as demand for automobiles grew on the back of easing credit markets. Meanwhile, the visible trade balance widened to -£7000 from -£6589 as rising imports outpaced a slight increase in exports. The lack of an improvement in demand for British goods considering the improvement in global conditions may be a concern for traders and adding weight to the sterling. It is clear that forex traders are looking past the political turmoil in the country and focusing on the improving fundamentals which continued with the growth in manufacturing output in April. The mining and oil sectors saw 2.4% and 2.5% gains during the month as rising commodity prices have spurred the increase in activity. Indeed, oil has risen back above $70 bbl which has helped pushed energy equities higher and the increase in risk appetite has been a driver of bullish cable price action. However the expectations of rising gas prices will dim outlook for consumer spending and could slow the pace of a global recovery. Japanese Yen weakend against the major and took resistance at 98.13 levels

Yen strengthened against the USD -Jun10.

Japanese Yen strengthened against the USD as Yields dropped on the above news. Support at 98 gave weigh but crosses continued to provide support on dips so the downside may be limited while risk appetite is strong. Core Machinery Orders fell -5.4% vs. 0.1% forecast.Chart is expected to have a bearish correction for the day . With the trading range between 96.80- 98.20 levels. Stochastic and Relative strength index are seen trending down giving bearish crossovers . currency is trading between the fast and slow moving averages. Good resistance at 98.40 levels and support is seen at 96.50 levels.

Euro and Pound continued the bull rally-Jun 10.

Euro regained above 1.4000 after Goldman Sachs put out a buy recommendation and the USD weakened after traders pared back bets of the US Fed raising rates this year. German Industrial Production was down -1.9% in April vs. 0.0% forecast. Looking ahead, May German CPI is forecast at -0.1%. Sterling continued the rally that began yesterday on route back above 1.6300 towards year highs above 1.66. Better than expected RICS house price balance helped propel the pair with gains above 1% for the day. Industrial Output is forecast at -0.1% vs. 0.0%. Also released, April Trade balance is forecast at -6.4Bn vs. -6.59Bn.

Technical Outlook:

EURO chart pattern is expected to be on a bullish note for the day. Currency is expected to trade in the range of 1.3950-1.4180 levels. Daily Momentum and stochastic are seen trending up and Euro is trading above the moving average giving a bullish outlook but Parabolic is still holding on the bear note. Good support is seen at 1.3920 break of which will see 1.3850 and key resistance is seen at1.4220 levels .

GBP chart pattern is expected to form a bullish pattern and trade in the range of 1.6130-1.6430 levels for the day. Momentum is seen trending up and the Relative strength index is also trending up hinting towards upward correction to 1.6450 .Key support for the currency is seen at 1.6080 levels.

Indian rupee up on hopes of improving risk appetite-Jun 10.

The Indian rupee rose for a second straight day as hopes for financial reforms in the budget in early July raised expectations foreigners would continue to bring in more capital. U.S. Dollar resumed weakening after a brief period of strengthening as speculation of future rate hikes in the US were dampened. In a survey of the major US bond traders all 16/16 thought the US would not raise rates this year. USD/JPY was lower even as stocks rallied on banking and mining stocks. Oil broke and closed above $70 a barrel. Crude Oil closed up $1.92 to finish the day at $70.01.Looking ahead, April Trade Balance forecast at -29BN vs. -28Bn previously.

Technical outlook:

USDINR is expected to trade in a bearish note for the day. With the trading range between 46.98-47.40 levels for the day. Good support is seen at 47.90 levels and key resistance is seen at 47.45 levels. Stochastic is trending down giving bearish crossovers and the currency is seen trading below the moving averages confirming the bear note.

Asian Market Summary-Jun 09.

The Indian rupee rose due to 3 percent rise in domestic shares which fuelled hopes for foreign fund inflows with the dollar's weakness against major currencies also boosting sentiment .U.S. dollar started to come under pressure as risk appetite has begun to pick up during European trading, a signal that greenback flows are still being driven by risks winds. A light economic docket will leave price action to the broader themes as wholesale inventories and two minor sentiment readings are on tap. The 1.1% drop in wholesale inventories shows that producers are remaining lean as a stabilizing economy hasn’t translated into a pick up in demand. However a pick up in retail sales could take the view that demand has helped dry up reserves which would add to the case that a recovery is under way. U.S. equity futures have turned negative, a sign that risk aversion is returning which could bring dollar support. Euro has started to turn lower after reaching as high as 1.3968 during overnight trading despite the German trade balance showing a significant drop in exports. Europe’s largest economy saw a 4.8% decline in demand for its products in April which erased a brief pick up in March. However, a 5.8% drop in imports led to a trade surplus of 9.4 billion which beat expectations of 9.3 billion. Meanwhile, German industrial production fell by 1.9% in April versus expectations of a 0.3% gain which has added to heavy Euro trading. The ECB’s Likanen was on the wires today cautioning of becoming too optimistic as any recovery for the global market will be slow. He also signaled that the central bank hasn’t put in a floor on interest rates which will add to speculation that more easing could be ahead. The central bank has been reluctant to cut rates below 1.00% and the fact that they are considering such a move may be a sign that downside risk remain for the economy. Pound looked to shake off political turmoil in the U.K. as signs that the housing sector is improving helped bring forex traders focus back to improving fundamentals and send the GBP/USD to as high as 1.6180. Indeed, the RICS house improved from -58.7% to -44.1% which was the highest reading since November, 2007. An improvement in the DCLG house price indicator from -13.6% to -13% bolstered the case that the sector is stabilizing which had been mired in its worst downturn since the Great Depression. However, BoE’s deputy governor for financial stability Paul Tucker warned that the medium term outlook for the economy remains uncertain took the steam out of Sterling bulls .The MPC announced that it was considering extending its asset purchase program to commercial paper which will help provide additional liquidity to the market. Last month’s improvement in mortgage approvals was a sign that the central bank’s efforts to spur lending are starting to gain traction and if the housing sector can begin to show stronger signs of improvement then we may see consumer optimism grow. Prime Minister Gordon Brown has regain control of the Labour party which may put an end to the political concerns which sunk sterling to end last week. Therefore, if markets continue to focus on improving fundamentals for the country then sterling bullish sentiment may return. Dollar fell against the yen to 98.55 due to selling by Japanese exporters..

Asian Market summary-Jun 09.

Euro and Pound shed some of their gains-Jun 09.

Euro sank to fresh week lows after Ireland was downgraded and Latvia was put on negative watch due to a currency devaluation risk. The bounce off lows was limited as the EUR/GBP came under pressure. German Industrial Orders were flat in April. Looking ahead, German April Industrial Output is forecast at 0.1% vs. 0.0% previously. Japanese Yen came under fairly heavy profit taking in the Asian morning before more USD buying emerge in Europe and help to keep EUR/JPY in a tight range. Crosses were mostly negative as their respective majors fell but most are still seeing the move lower as corrective. Sterling continued to be sold as another day of political uncertainty began in the UK. Support at 1.5800 held firm and support from EUR/GBP selling helped cable get back above 1.6000. Supporting the rebound was improvement in banking stocks and talks of Barclays selling its Investment Unit to Blackrock. BRC Retail Sales at -0.8% vs. 4.6% previously.

Tech outlook:
EURO chart pattern is expected to be on a bearish note for the day. Currency is expected to trade in the range of 1.3750-1.3960 levels. Daily Momentum and stochastic are seen trending down and Euro is trading below the moving average and Parabolic is holding its bearish outlook. Good support is seen at 1.3720 break of which will see 1.3380 and key resistance is seen at1.4020 levels .

GBP chart pattern is expected to form a bearish pattern and trade in the range of 1.5790-1.6100 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.5750 .Key resistance for the currency is seen at 1.6150 levels.

Rupee opened on a weaker note in early trade-Jun 09.

The Rupee stayed close to 2-week lows as losses in other regional share markets raised worries foreigners could withdraw funds from local stocks. U.S. Dollar continued where it left off on Friday and gained heavily against most currencies. Stocks were mixed, as were metals with Oil bouncy but copper struggling under heaving profit taking. Markets were quieter than usual with Australia away during the Asian session. Crude Oil finished down -$0.38 at $68.05. Looking ahead for Treasury Sec Geithner to Speak.

Technical analysis

USDINR is expected to trade in a bullish note for the day. With the trading range between 47.30-47.85 levels for the day. Good support is seen at 47.20 levels and key resistance is seen at 47.93 levels. Stochastic is trending up and the currency is seen trading above the moving averages and on the upper bollingers giving a caution signal.

Evening Report-Jun 08.

The Indian Rupee extended its fall and found support at 47.74 levels in tandem with the dollar's extended rally against major curencies overseas, while losses in the local shares added to the downward pressure.However Indian Unit recovered partially and closed at 47.55 levels for the day. U.S. dollar continues to find support following better than expected Non-farm payroll number which showed that the pace of job losses significantly slowed for the economy. However, we are seeing weak equity markets in Asian and Europe with U.S. futures pointing toward a lower open and the risk aversion could also be adding greenback support. It is still too early to tell whether we are seeing a shift toward positive U.S. fundamentals generating bullish price action or whether risk winds will continue to be the overriding factor in price action. Nevertheless, both scenarios are signaling more dollar strength ahead and which should continue without any fundamental releases on the economic docket to impact sentiment. This week’s Fed Beige book and U.S. retail sales reports will help give us more insight into whether the improving outlook for the U.S. economy will now become a positive force in future dollar sentiment. Euro continues to remain under pressure as it fell to as low as 1.3810 during overnight trading as heavy equity markets, profit taking and concerns over Latvia helped send it lower. The European Sentix investor confidence indicator rising above expectations of -31 to -27 temporarily helped slow the downside momentum as the increasing optimism may be a sign that the Euro-zone economy is reaching a bottom. However, the depth of the Latvian recession and the amount of intervention the government has needed to maintain the peg to the euro has raised concerns in the region which continues to send the EUR/USD lower. Nevertheless, President Trichet following the ECB’s rate hold last week stated, that the committee believes that the worst has passed and that signs of a recovery are emerging. The central bank leader said that interest rates were appropriate for now, which left the door open for another rate cut. Therefore, if we continue to see continued trouble from the emerging economies in the region further easing is still a possibility which could add to bearish Euro sentiment. The biggest threat to the single currency could be the pace of the U.S. recovery which appears to be well ahead of Europe. The Sterling has also broken below its 20-Day SMA as the country’s political turmoil continues to steer forex traders away from the currency. Indeed, last week saw Prime Minster Gordon Brown reshuffle his cabinet in order to try and reestablish loyalty of ministers after several walked out of his government. The move hasn’t helped the Labour party which is running third in the elections and the uncertainty of the political direction of the country continues to be a weighing factor for the currency. . Japanese Yen remained Flat and was seen at 98.55 As Improved Eco Watchers Added to Yen Support

Euro and Pound traded lower-Jun 08.

Euro bounced off the support area that held the pair since late April. Currency gained 50 pips, being one of the few pairs that moved decisively throughout session. This week the Euro-area calendar is free of top-tier releases, something that may affect the pair's momentum. Pound lost more than 600 pips over the last three days of trading as the market is penalizing the unstable U.K. government. This caused the pound to be the worst performer over the last period.

Technical outlook:

EURO chart pattern is expected to be on a sideways note for the day. Currency is expected to trade in the range of 1.3850-1.4060 levels. Daily Momentum and stochastic are seen trending down and Euro is trading below the moving average only crossover can confirm the trend. Parabolic is holding its bearish outlook. Good support is seen at 1.3820 break of which will see 1.3750 and key resistance is seen at1.4120 levels .

GBP chart pattern is expected to form a bearish crow pattern and trade in the range of 1.5830-1.6020 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.5750 .Key resistance for the currency is seen at 1.6050 levels.

Rupee weakened on dollar selling- jun 08.

The Rupee quoted low against the dollar following weak Asian currencies and selling of the dollar by banks. The U.S. currency gained the most versus majors in more than three months as traders added to bets the Federal Reserve will boost interest rates this year after a government report showed the U.S. lost fewer jobs than expected in May.

Technical Outlook:

USDINR is expected to trade in a narrow trade for the day. With the trading range between 47.10-47.40 levels for the day. Good support is seen at 47.02 levels and key resistance is seen at 47.50 levels. Stochastic is trending up and the currency is seen trading above the moving averages but tight bollingers shows a narrow trade.

Fundamental Outlook_jun 08-13

Indian rupee held in a tight band of 46.73-47.32 and closed at 47.10 levels unchanged for a third week as post-election strength remained contained by worries that the central bank did not want the currency surging past 47 per dollar. The rupee was unable to sustain any gain beyond 47 since jumping about 5 percent in two days after the ruling coalition won an unexpectedly strong mandate at elections and the central bank appeared to be buying dollars to stem its strength .Foreign exchange reserves rose $1.66 billion for the week largely due to dollar purchases by the Reserve Bank of India to stem the rise of the rupee against the dollar. Also there has been some revaluation impact of non-dollar assets in reserves because the dollar is weakening against the local currency in international markets. With foreign portfolio investors bringing in chunks of dollars into the country, RBI has been mopping up these inflows to prevent the rupee from strengthening against the dollar.
Looking ahead for Dollar US economic calendar promises far fewer top-tier releases in the days ahead as what it lacks in quantity it compensates with substance. Foreseeable highlights will come on historically market-moving Advance Retail Sales data, University of Michigan Consumer Confidence survey results, and international Trade Balance figures. NFP numbers showed that the US consumer lost fewer jobs than feared through the month of May, but the sizeable loss still bodes poorly for downtrodden household spending rates. Given the combination of massive wealth destruction and near-catastrophic jobs losses, the historically voracious US shopper cut back on Retail spending by a sizeable 9.4 percent . University of Michigan Consumer Confidence and Trade Balance forecasts are relatively sanguine, but they are less likely to force major US Dollar moves than the Advance Retail Sales report. Looking ahead the Euro Zone’s economic calendar will look relatively light. Sentix Investor Confidence is anticipated to improve slightly to an 8-month high of -31 for the month of June from -34.3, as European equity markets have steadily climbed higher. Meanwhile the German Trade Balance and Industrial Production readings for the month of April are likely to reflect the impact of weak export demand from the nation’s trading partners, as the trade surplus may narrow to 9.3B euros from 11.3B euro, while industrial output could shrink an annualized 20.5 percent. The final German CPI figures aren’t anticipated to reflect any revisions but that is expected to leave the annualized rate of inflation at zero, signaling deflation potential. Finally, the ECB’s Monthly Report may not shed much more light on the ECB’s policy bias, Investors are likely to keep an eye out for surprising comments as they could easily shake up the euro upon As for Pound data, the docket is thin but potent. Consumer spending will be measured through the BRC’s retail sales for May. Though expectations are low. For factory activity, the plunge in industrial production has eased significantly through first quarter. Housing price indicators and trade figures will round out the picture with indirect appraisals of credit availability and foreign demand. Thorough measure of health next week for Yen will be the final reading of 1Q GDP, which will no doubt confirm the worst slump on record. The more timely indicators could bolster sentiment though and few bright spots on the economic calendar are the trade balance, Eco Watchers survey, consumer confidence survey and leading indicators index are all expected to show measured improvements next week. Upcoming data suggests that the Australian economy is in the midst of a continued downturn, interest rate expectations could change as the Australian labor markets started to deteriorate during the second half of 2008 and this is likely to continue through 2009. While we did see a surprise improvement in April, the May results are projected to show that the unemployment rate rose back up to 5.7 percent while the net employment change is anticipated to fall by 30,000. The latter report tends to have a greater impact on the Aussie since the figure rarely meets expectations and can lead to volatile short-term price action for the Australian dollar.

Evening Report-Jun 05.

The Indian Rupee was virtually unchanged in low volume in line with other Asian currencies as a steady stock market failed to provide direction. The U.S. dollar lost ground during the overnight as higher equity prices continued to fuel a rise in risk appetite however, a dismal Non-Farm Payrolls report could drag on the markets as investors weigh the outlook for global growth. The U.S. labor market is projected to have lost 520K jobs in May, while the annual rate of unemployment is anticipated to reach a 26-year high of 9.2% but, the ADP report earlier this week showed a 532K drop in private-payrolls, which already exceeds the NFP forecast, and a bigger-than-expected drop in employment could drive the greenback higher as the reserve currency continues to benefit from safe-haven flows. In addition, the economic docket is expected to show a slower decline in consumer credit for the month of April but nevertheless, the release may reflect a deepening downturn in lending activity as households face a weakening labor market paired with a weakening outlook for future growth. The Euro ticked up during the overnight trade to reach an intra day high of 1.4229, but pare gains throughout the European session to trade at 1.4190 ahead of the U.S. Non-Farm Payrolls report. . Nevertheless ECB President Trichet continued to reinforce an improved outlook for future growth following the interest rate decision while the Bundes bank expects economic activity in Germany to contract 6.2% this year and stagnate in 2010. In addition the German central bank went onto say that they expected price growth to average 0.1% this year, while the annual rate of unemployment is anticipated to reach 10.5% by the middle of next year. The British pound continued to retrace the advance from earlier in the week during the overnight session, and slipped to an intra day low of 1.6018 as Prime Minister Gordon Brown faced pressures to resign from office. Mr. Brown shuffled the members of his Cabinet in an effort to secure his position, while rumors emerged Alistair Darling will continue to hold his post as the Chancellor of the Exchequer. As political tensions threaten the outlook for long-term stability, the Sterling may continue to depreciation against its major currency counterparts, and investors are likely to hold a bearish bias against the pound as the outlook for growth and inflation remain bleak. Meanwhile the economic docket for the U.K. showed producer prices increased for the third consecutive month in May, with input prices rising 0.4% from the previous month, led by higher energy costs. At the same time output prices increased 0.4% during the month with the annual rate falling 0.3% while the core measure grew 0.2% during the month amid expectations for a 0.3% rise. Japanese Yen plunged to a 3-day low of 96.93 against the US dollar.

Yen edged higher-Jun 05.

Japanese Yen with the USD/JPY starting to edge higher the market is on edge that the Yen may be close to new bouts of selling with crosses sitting just under new head highs. EUR/JPY remained buoyant although year highs at 138 are proving difficult to test. chart is expected to have a bullish correction for the day . With the trading range between 96.20- 97.20 levels. Stochastic and Relative strength index are seen trending up and the currency is trading above the moving averages trying to form bullish crow pattern taking resistance at 97.50 levels .Good support is seen at 96.00 levels.

Euro rangeboung but sterling pushed lower-Jun 05.

Euro kept to a relatively tight range with weakness before the ECB press conference being short-lived. When Trichet said nothing to spook the market and the ECB held at 1.00% with no expansion of the quantitative easing the market tested 1.4200 but couldn’t close above. Looking ahead, Trichet Speaks. Sterling surged on news housing prices jumped 2.6% in May from a Halifax report. The BoE held at 0.5% and did not expand QE program. Rumors of PM Brown resignation sent the pair crashing towards 1.61. Also weighing on the Pound was end of the $15B chinalco-Riotinto deal. Looking ahead for PPI is forecast at 0.8% in May.

Technical Outlook:

EURO chart pattern is expected to be on a sideways note for the day. Currency is expected to trade in the range of 1.4060-1.4300 levels. Daily Momentum and stochastic are seen trending down and Euro is trading on the moving average only crossover can confirm the trend. Parabolic is holding on its bullish outlook. Good support is seen at 1.4020 break of which will see 1.3980 and key resistance is seen at1.4330 levels .

GBP chart pattern is expected to form a bearish crow pattern and trade in the range of 1.5990-1.6230 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.5930 levels break of which will take it to 1.5880 .Key resistance for the currency is seen at 1.6280 levels.

Rupee in narrow trade on steady stocks-Jun 05.

Rupee strengthened in early trade due to heavy dollar buying in anticipation of heavy capital inflow by foreign funds buoyed by the announcement of the Government's 100-day agenda. U.S. Dollar was relatively unchanged against most pairs as the large moves seen on Wednesday night were consolidated. The major move seen in the market was the GBP/USD which fell aggressively after rumors spread through the market of PM Brown possibly resigning. Weekly Jobless Claims improved to 621K vs. 625K. Crude Oil finished down $2.69 to finish the day at $68.81 a barrel. Looking ahead for May Non Farm Payrolls are forecast at -520K vs. -539K. The May Unemployment rate is forecast at 9.2% vs. 8.9%.

Technical Outlook:

USDINR is expected to trade in a narrow trade for the day. With the trading range between 46.90-47.22 levels for the day. Good support is seen at 46.78 levels and key resistance is seen at 47.32 levels. Stochastic is trending down and the currency is seen on trading above the moving averages but tight bollingers shows a narrow trade.

Evening Report-Jun 04.

Indian unit closed at 47.19 and was seen on a weakening note as Indian state-run banks were seen buying dollars around 47.10 rupees as the Indian currency tried to edge back towards seven-month peaks reached in the previous session.Mixed clues from stock market also avoided volatile trade.The U.S. dollar weaken against its European counterparts and may continue to face increased selling pressures ahead of the BoE, ECB, and BoC rate decisions as the policymakers attempt to put a floor on their respective benchmark interest rate, and a rise in market sentiment is likely to weigh on the exchange rates as market participants raise their appetite for higher risk/reward investments. At the same time, a report by the Labor Department is anticipated to show a fall in initial jobless claims, while continuing claims for unemployment benefits are expected to rise to a record-high of 6855K in the week ending May 23. As investors eagerly await the Non-Farm payrolls report scheduled for Friday, a dismal jobless claims report could spur demands for the greenback as the reserve currency continues to benefit from safe-haven flows. Euro bounced back to reach an intraday high of 1.4243 against the U.S. dollar during the overnight session, and the single-currency may continue to push higher into the U.S. open as the European Central Bank attempts to put a floor on the benchmark interest rate. At the same time, the central bank is widely expected to unveil its outline for the EUR 60B covered bond purchase in full detail however, as the Governing Council fails to meet on common ground, a lack of decisive action could weigh on the exchange rate as the outlook for growth and inflation remains bleak.The economic docket for the Euro-Zone showed retail spending increased 0.2% in April, which was in-line with expectations, while the annual rate of consumption slipped 2.3% from the previous year amid expectations for a 2.9% drop. Nevertheless, The ECB rate decision highlights the major event risk for the euro over the next 24 hours of trading, and the Q&A session with President Trichet is likely to move the markets as investors continue to weigh the outlook for future policy. The central bank head is likely to hold a dovish tone as he expects inflation to fall below the 2% target later this year but at the same time, the CPI estimate fell to a record-low of 0.0% in May, and mounting risks for deflation could lead policymakers to ease policy further in an effort to stimulate the ailing economy. British pound pared losses during the overnight, and bounced back to reach an intraday high of 1.6435 during the European trade as U.K. house prices unexpectedly increased in May. The Halifax house price index increased 2.6% from April, which beat expectations for a 1.0% drop, while prices fell at an annual rate of 16.3% in the three-months through May. Meanwhile, the Bank of England is widely expected to hold the benchmark interest rate steady at the record-low of 0.50%, and market participants speculate that the central bank will utilize the remaining GBP 25B of the GBP 150B allotted by the Chancellor of the Exchequer in an effort to stem the downside risks for growth and inflation. However the MPC may adopt a wait-and-see approach this month as policymakers anticipate an economic recovery this year, and long-term expectations for higher interest rates may continue to drive the British pound higher over the near-term as the BoE puts a floor on the interest rate.Yen plunged to a 3-day low of 96.70 against the US dollar as Japanese Q1 Capex Plummets On Easing Profits .Japanese companies reduced their spending on plant and equipments in the first three months of 2009 as plunging profits forced corporates to cut investment.

Yen traded on a tight range-Jun 04.

Japanese Yen kept inside the recent range around 96 Yen as the crosses took the brunt of the action overnight. Carry trades were sold aggressively from year highs. AUD/JPY and CAD/JPY were especially hard hit. Q1 Capex -25% y/y. Chart is expected to have a bullish correction for the day . With the trading range between 95.80- 96.80 levels. Stochastic and Relative strength index are seen trending up and the currency is trading above the moving averages trying to form bullish crow pattern taking resistance at 97.10 levels .Good support is seen at 95.50 levels.

Pound and Euro dropped ahead of rate decision-Jun 04.

Euro took a major hit in early Europe on the Asian central bank news as traders took profits on the recent rally and ahead of the ECB meeting tonight. Further losses were limited however as the Euro managed to gain against other riskier currencies. Of concern is recent reports of funding crisis in eastern Europe. Sterling dropped hard in the face of better than expected economic data with profit taking in full control. The sharp drop also coincide with a recommendation from Goldman Sachs to exit long cable trades as the 1.6500 level objective has been reached. GBP/JPY was also rejected the 160 Yen level. Looking ahead BOE rate Announcement.

Technical Outlook:

EURO chart pattern is expected to be on a sideways to bearish note for the day. Currency is expected to trade in the range of 1.4050-1.4300 levels. Daily Momentum and stochastic are seen trending down and Euro is trading above the moving average hinting that long term bull trend remains intact. Good support is seen at 1.4020 break of which will see 1.3980 and key resistance is seen at1.4330 levels .

GBP chart pattern is expected to trade in the range of 1.6120-1.6430 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.6080 levels .Key resistance for the currency is seen at 1.6530 levels.

Rupee depreciated as USD stabilized-Jun 04.

Indian rupee depreciated against the dollar in early trade today as banks bought the dollar on behalf of importers and after the USD stabilized against a basket of currencies in Asian markets. U.S. Dollar enjoyed a positive day on the back of large corrections on multiple currencies. Large moves in Europe were seen on the back of combined statements from the Japan, India, Korea and China all supporting US debt. US stocks fell after ISM non manufacturing at 44.0 vs. 45.1 forecast. Crude Oil finished down $2.43 to finish the day at $66.12 a barrel. Looking ahead, Weekly Jobless Claims are forecast at 620 vs. 623K previously.

Technical Outlook:

USDINR is expected to trade in a narrow range and give bullish correction for the day. With the trading range between 47.05-47.42 levels for the day. Good support is seen at 46.90 levels and key resistance is seen at 47.50 levels. Stochastic is trending up and the currency is also seen trading above the moving averages giving bullish outlook but tight bollingers shows a narrow trade.

Euro and pound shed their gains as market in overbought levels-Jun 03.

The Euro another day, another fresh high as the rally continued above 1.4300. The April Unemployment rate ticked higher to 9.2% vs. 8.9% previously. The market is now looking to the ECB meeting on Thursday and whether they expand the Quantitative Easing program. Looking ahead for May PMI Services are forecast at 44.7 vs. 43.8 previously. Also released April PPI is forecast at -0.8% vs. -0.7% m/m previously. . Sterling dipped into the start of the European session as UK credit Growth was weak at 300m Pounds in April, up on March but still well down on historical averages. EUR/GBP gave up some of the recent gains as the Euro continued its rally unaffected. Looking ahead for PMI services are forecast at 49.2 vs. 48.7 previously.

Technical Outlook:

EURO chart pattern is expected to be on a sideways to bearish note for the day. Currency is expected to trade in the range of 1.4250-1.4380 levels. Daily Momentum and stochastic are seen trending down and Euro is trading above the moving average hinting that long term bull trend remains intact. Good support is seen at 1.4190 and key resistance is seen at1.4400 levels .Market strategy for the day is Sell at 1.4370, Target : 1.4260,1.4190 Stop loss : 1.4420
GBP chart pattern is expected to trade in the range of 1.6490-1.6695 levels for the day. Momentum is seen trending down and the Relative strength index is also trading at overbought areas hinting towards the possibility of downside correction to 1.6450 levels .Key resistance for the currency is seen at 1.6720 levels. Caution required as the market holds above the moving average and only break below it can confirm the trend.