Morning Report


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Monday, 3 August 2020

HeadLines

  • Dollar on defensive as U.S. recovery story in doubt
  • Asia stocks cautiously mixed
  • Oil edges lower on oversupply concerns as OPEC+ set to raise output

Major Currency Rates at 8 AM

Currencies

The U.S. dollar ticked up in early Monday trade, clinging to its rebound late last week, but mounting concerns about a slowing U.S. economic recovery from coronavirus epidemic kept a lid on gains.

The dollar’s decline is likely to continue. Real U.S. interest rates are declining even as the country is running a big current account deficit, a situation we hadn’t have for a long time. U.S. bond yields have fallen to their lowest level since the market turmoil in March triggered by the pandemic, with the 10-year yield slipping to near 0.50%, undermining the yield attraction of the dollar.

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  Flat around  74.91.

The Rupee is likely to have resistance at 75.36 (Bollinger Band)  and 75.58 (100 Day Moving Average)  and support at  74.76 (7 day and 14 day Moving Average) and 74.51 (Bollinger Band).

Equity

Asian share markets turned mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan amid a global surge of new coronavirus cases, though a squeeze on crowded short positions gave the dollar a rare bounce.

Sentiment was helped by a survey showing China’s factory activity expanded at the fastest pace in nearly a decade in July, with the Caixin/Markit PMI at 52.8. That lifted Chinese blue chips 0.9%. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, though that was from a six-month top.Japan’s Nikkei added 2.1% courtesy of a pullback in the yen, while South Korea shares were flat.E-Mini futures for the S&P 500 inched up 0.1%, while EUROSTOXX 50 futures and FTSE futures were little changed.

OIL

Oil prices fell on Monday on concerns about oversupply as OPEC and its allies, together known as OPEC+, are due to pull back from production cuts in August while an increase in COVID-19 cases worldwide raised fears of slower pick-up in fuel demand.

Brent crude futures slid 8 cents, or 0.2%, to $43.44 a barrel by 0001 GMT while U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.3%, at $40.15 a barrel.

Source : Reuters

Morning Report


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Friday, 31 July 2020

HeadLines

  • Dollar slips as Trump suggests election delay
  • Asian stocks set to rise on Big Tech surge, dollar slides
  • Oil sinks on weak U.S. economic data, political uncertainty

Major Currency Rates at 8 AM

Currencies

The U.S. dollar extended its recent decline on Thursday after U.S. President Donald Trump raised the possibility of delaying the nation’s November presidential election, while the euro hit a two-year high.

The greenback has been in a month-long nosedive as the continued spread of coronavirus across U.S. states weighs on the economy, and is on track for its worst monthly performance in a decade.Data on Thursday showed that the U.S. economy contracted by 32.9% in the second quarter, the steepest pace since the Great Depression.

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  Flat around  74.88.

The Rupee is likely to have strong resistance at 75.37 (Bollinger Band)  and 75.56 (100 Day Moving Average)  and support at  74.81 (7 day Moving Average) and 74.44 (Bollinger Band).

Equity

Asian equities were set to rise on Friday after shares of Apple, Amazon and Facebook  surged in extended trading on Thursday, with Alphabet  also climbing, while the U.S. dollar continued to slide.

Hong Kong’s Hang Seng index futures rose 0.06%. Australian S&P/ASX 200 futures  lost 0.47%, while Japan’s Nikkei 225 futures added 0.34%. On Wall Street, the Dow Jones Industrial Average fell 225.92 points, or 0.85%, to 26,313.65, the S&P 500 lost 12.22 points, or 0.38%, to 3,246.22 and the Nasdaq Composite added 44.87 points, or 0.43%, to 10,587.81.

Singapore nifty SGX was trading plus 65 points  at 11,150 at 8 AM IST.

OIL

Oil prices sank on Thursday following poor U.S. economic figures and after U.S. President Donald Trump roiled markets with a suggestion that the nation should delay its November presidential election.

U.S. West Texas Intermediate (WTI) crude futures settled down $1.35, or 3.3%, at $39.92 a barrel after falling 5% earlier in the session.Brent crude futures, which expire on Friday, fell 81 cents, or 1.9%, to $42.94 a barrel.

Source : Reuters

Morning Report


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Thursday, 30 July 2020

HeadLines

  • Dollar bogged at two-year low as Fed maintains dovish script
  • Federal Reserve sees dim economic outlook as coronavirus squeezes economy, keeps rate unchanged
  • Asian stocks set to rise on Fed policy, dollar hits two-year low
  • Oil edges up after sharp U.S. crude inventory drop

Major Currency Rates at 8 AM

Currencies

The dollar was mired at a more than two-year low on Thursday as the Federal Reserve repeated a pledge to limit damage from the pandemic as surging new coronavirus cases hamper the economy.

The dollar has been tumbling on expectations that the Fed will continue its ultra loose monetary policy for years to come and on speculation that it will allow inflation to run higher than it has previously indicated before raising interest rates. The dollar index fell 0.52% on Wednesday and steadied at around 93.275, its lowest in more than two years.

he dollar index against a basket of currencies gained 0.18% to 93.71, after dropping to 93.47 on Monday, the lowest since June 2018.

FED Policy

The Federal Reserve is expressing concern that the viral outbreak will act as a drag on the economy and hiring in coming months and that it plans to keep its benchmark short-term interest rate pegged near zero.

The Fed announced no new policies in its statement. The central bank said it will also continue to buy about $120 billion in Treasury and mortgage bonds each month, which are intended to inject cash into financial markets and spur borrowing and spending.

We expect that this loose monetary policy will keep dollar on back foot and the liquidity injection will keep the Equity markets in the Current Bull run. 

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  around  74.92.

The Rupee is likely to have strong resistance at 75.36 (Bollinger Band)  and 75.56 (100 Day Moving Average)  and support at  74.76 (7 day Moving Average) and 74.50 (double bottom).

Equity

Asian stocks were set to track an upbeat Wall Street session on Thursday after the Federal Reserve kept interest rates at ultra-low levels, while the U.S. dollar fell to a two-year low.

The Dow Jones Industrial Average on Wednesday ended 0.6% higher, the S&P 500  gained 1.24% and the Nasdaq Composite added 1.35%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.28%, while its global stock index rose 0.81%. Australian S&P/ASX 200 futures  were up 0.9% while Japan’s Nikkei 225 futures were down 0.04%. Hong Kong’s Hang Seng index futures  rose 0.14%.

Singapore nifty SGX was trading plus 25 points  at 11,240 at 8 AM IST. Indian Equities are likely to be volatile due to Expiry today.

OIL

Oil prices rose on Wednesday after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check.

Brent crude futures settled at $43.75 a barrel, up 53 cents, or 1.2%. U.S. West Texas Intermediate crude futures CLc1 settled at $41.27 a barrel, gaining 23 cents, or 0.6%.

U.S. crude oil inventories fell by 10.6 million barrels last week to 526 million barrels, the Energy Information Administration said, the largest drawdown since December. 

Source : Reuters

Morning Report


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Wednesday, 29 July 2020

HeadLines

  • Dollar bounces before Fed meeting, further weakness expected
  • Asian stocks under pressure, gold rallies on U.S. stimulus impasse
  • Oil falls as U.S. stimulus package faces tough talks

Major Currency Rates at 8 AM

Currencies

The dollar index bounced off a two-year low on Tuesday but looked primed for further weakness as the United States continued to see a rise in coronavirus cases, while the Federal Reserve is expected to maintain very loose monetary policies.

The dollar index against a basket of currencies gained 0.18% to 93.71, after dropping to 93.47 on Monday, the lowest since June 2018. The continued spread of coronavirus is hampering the U.S. economic recovery, while regions like Europe appear to have the virus contained.

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  around  74.90.

The Rupee is likely to have strong resistance at 74.95 (14 Day  Moving Average)  and 75.46 (Bollinger Band)  and support at  74.74 (7 day Moving Average) and 74.50 (double bottom).

Equity

Asian equities pulled backed on Wednesday as an impasse in U.S. economic stimulus negotiations pushed global stocks lower and sent investors into safe-haven assets like gold, which hovered near record highs. 

Hong Kong’s Hang Seng index futures were down 0.14%. Australian S&P/ASX 200 was flat while Japan’s Nikkei 225 futures dipped 0.5%.U.S. data released on Tuesday showed consumer confidence ebbed in July as coronavirus infections flared across the country.The data, along with stimulus concerns, weighed down Wall Street, where the Dow Jones Industrial Average fell 0.77%, the S&P 500 dipped 0.65%, and the Nasdaq Composite  lost 1.27%.

Singapore nifty SGX was trading flat at 11,300

OIL

Oil prices fell on Tuesday as U.S. lawmakers prepared to wrangle over an economic stimulus package and investors worried about a rise in coronavirus cases worldwide.

Brent crude futures fell 19 cents, or 0.4%, to settle at $43.22 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 56 cents, or 1.4%, to settle at $41.04 a barrel.

Source : Reuters

Morning Report


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Tuesday, 28 July 2020

HeadLines

  • Dollar in the doldrums as focus turns to Fed, U.S. fiscal package
  • Asian stocks up as US fiscal package gives hopes
  • Oil prices rise on U.S. stimulus hopes, weaker U.S. dollar

Major Currency Rates at 8 AM

Currencies

The dollar nursed losses on Tuesday, after slumping to a two-year low, as investors worry about the damage from the coronavirus to the U.S. economy and await the latest outlook from the Federal Reserve and the passage of a new fiscal rescue package.

The U.S. currency’s drop has put a rocket under gold prices and has the yen standing near its highest in four months, the euro just below a 22-month high and the kiwi close to its strongest since January. While the moves were modest, they kept pressure on the greenback ahead of the two-day Federal Reserve meeting that gets underway later Tuesday as speculation mounts about a possible shift in policy emphasis – even if no policy change is expected.

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  around  74.80. Last Week it touched 74.50 where the central Bank was seen buying dollars.

The Rupee is likely to have strong resistance at 74.95 (14 Day  Moving Average)  and 75.53 (100 days moving average)  and support at  74.50 (double bottom) and 74.36 (Bollinger Band)

Equity

Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.77% while the Hang Seng is up 0.80%. The Nikkei 225 is not trading.

OIL

Oil prices rose for a third straight day on Tuesday, buoyed by support for demand coming from efforts to stimulate the U.S. economy’s recovery from the coronavirus crisis and a weakening of the dollar that makes crude cheaper for global buyers.

Brent crude futures climbed 35 cents, or 0.8%, to $43.76 a barrel adding to a 0.2% gain on Monday.U.S. West Texas Intermediate (WTI) crude futures gained 27 cents, or 0.7%, to $41.87 a barrel, building on a 0.75% rise on Monday.

Source : Reuters

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