DAILY FOREX REPORT FOR EXPORTERS AND IMPORTERS : 5th July 2018

DAILY FOREX REPORT FOR EXPORTERS AND IMPORTERS
(inter-bank prices below)

Executive summary

·        The three day trend till Monday can set the direction for global currency markets for this quarter.

·        I am against going long in the US dollar unless there is another technical breakout.

·        Crude oil price direction will dictate India and emerging market currencies.

World

European central bank meeting, US jobs numbers today and tomorrow among the spate of economic data releases worldwide can result in currency markets behaving like a drunk man. US June nonfarm payrolls needs to come in over 200,000 tomorrow (without any previous month backward revision) for the US dollar to gain further. Easing of political squabble in Germany will be bullish for euro. UK economy is showing signs of a slow and steady growth.

India

Economic data release suggest that India economic growth may have formed a medium term bottom. The lagging effects of continued rise in petrol and diesel price since April will pinch economic growth from July. School summer vacations in May and June generally results in higher personal consumption. Thereafter consumer become frugal. Rural India waits for monsoon rains between July and September period. Other than services and exports, rest of the economic indicators should see a slowdown in July to August quarter. The internet if filled with 68-72 trading range for usd/inr. If nymex crude oil trades over $80 for more than a month anytime for the rest of the year, I expect rupee breaking past 72. It is only crude oil and nothing else for the rupee. The pace of decline will be much slower. 2013 will not be repeated in 2018. Lessons have been learnt. Usd/inr can move into a short term bearish phase if it trades below 68.00 next week.

US dollar-Indian Rupee (usd/inr CMP 68.8350): Support: 68.6775. Resistance: 68.9825-69.1050. (a) It can fall to 68.4750 and 68.1850 as long as it trades below 69.1050 (b) Only a break of 69.1050 will trigger another wave of rise to 69.4250.

Forward cover strategy for exporters: Receivables till tomorrow should be hedged today. Use trailing stop loss of 68.4675 for receivables for next week.

Forward cover strategy for importers: Use any 30-40 paisa fall to hedge for payables till Monday. Use a stop loss over 69.1050 for next week’s payables. Those who wish to take a risk should leave open short term payables till Monday.

Euro/Indian Rupee (Euro/inr CMP 80.2475): Support: 79.8825 Resistance: 80.5800. (a) Trend is bullish as long as euro/inr trades over 100 day moving average of 79.8825 with 80.5800 and 81.0225 as price target by Monday.

Forward cover strategy for exporters: Use a stop loss below 79.8825 for receivables till Monday.

Forward cover strategy for importers: Cover on any 30-40 paisa fall for payables till Monday.

UK Pound/Indian Rupee (Gbp/inr CMP 91.0500): Support: 90.9725 Resistance: 91.3525. (a) Cable can rise to 92.1025 by Monday as long as it trades over 90.5000-90.9725. (b) Short term bearish trend will be there only if cable trades below 90.5000 on Monday (c) Trend at the moment is bullish.

Forward cover strategy for exporters: Leave July end receivables with a stop loss below 90.5050.

 Forward cover strategy for importers: Cover on any 50-60 paisa fall for payables till Monday.

Japanese Yen/Indian Rupee (Jpy/inr CMP 62.3700): Support: 62.1950. Resistance: 62.5200. (a) There will be a technical breakout over 62.5200 to 62.9600 and 63.1725. (b) Sellers will be there below 62.1950. (c) Trend is bullish.
Euro/US dollar (euro/usd CMP 1.1658): Support: 1.1576-1.1624 Resistance: 1.1733. Euro/usd needs to trade over 1.1556 till Monday to rise to 1.1806 and 1.1900
UK Pound/US dollar (gbp/usd CMP 1.3226): Support:1.3176 Resistance: 1.3316. (a) Trend is bullish. (b) Cable can rise to 1.3316 and 1.3737 by tomorrow as long as it trades over 13138.
US dollar/Japanese Yen (usd/jpy CMP 110.38): Support: 110.07 Resistance: 110.76. (a) Yen can fall to 108.97 by Monday in case it does not break 111.17. (b) Trend is down (c) Yen needs to trade over 110.76 today to rise further.
US dollar/Indonesia Rupiah (usd/idr CMP 14446.00): Support: 14360.00 Resistance: 14478. There will be a technical breakout over 14514 to 14669. Look for signs of trend reversal till Monday. If rupiah rises on Monday and Tuesday and trades over 14514 then 15000 will be there before 31^st July.



Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto currency, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani

NOTES TO THE ABOVE REPORT

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

ALL PRICES ARE IN INDIAN RUPEE UNLESS OTHERWISE SPECIFIED

Indian Standard Time (IST): +5:30 GMT

Current Market Price (CMP)

All foreign exchange prices are for inter-bank rates.