Nifty & USD/INR Report- 12th July, 2012

Daily Nifty Analysis

Nifty Analysis By xDirect India

Indian equities extended intraday losses and is near day’s low as traders continued to book profits after a sharp up-move in last session and weak global cues. Brokers said reports of less than average monsoon rains this season might hamper efforts to boost economy and hurt company earnings this quarter impacted the market sentiment. The IMD said that monsoon, the life- line of Indian agriculture, has covered the entire country but rains are still deficient by 23%. Indian markets ended today`s session on a lower note on the back of weak global cues and heavy selling witnessed in auto, FMCG, realty and metal stocks.

The gap down open in the market has definitely enabled the sellers to prompt their activities considering we had yet other depressing FOMC minutes where no sign of QE was provided. This shifted the mindset of traders which now in turn are in selling activities. The immediate resistance comes in at 5290 levels followed by 5325 levels on the rising trend line (former support and now resistance). Expect selling pressure to remain at higher levels unless we have a fundamental trigger which makes the price action to close above 5320 levels, would negate the bearish bias.

View on Indian Rupee

USD/INR Analysis By xDirect India

The Indian Rupee extended losses on Monday falling to its lowest levels in almost a week led by weak cues across the Asian and European stocks markets and post the acute drop in the Euro on Friday which slipped to its two year lows below the 1.2300 level. Broad weakness in the domestic stock markets also put pressure on the local currency which finished with a loss of a percentage yesterday. It seems even though a slight positive reaction in the European currencies did not aid any boost to risk appetite neither towards appreciation to INR value. We therefore require a more of a fundamental trigger that would enable an upside in the same.

The USDINR pair seems to hold its daily Fibonacci support at 55.74 and if it continues to do so then we are looking at 55.92, 56.08 and then 56.14. However a break of intraday low which is also the support (Fibonacci) then 55.65 followed by 55.50 would be tested. We keep our bias on the upside.


Report By
xDirect India
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Nifty & USD/INR Report- 9th July, 2012

Daily Nifty Analysis

xDirect India's Nifty Analysis_09.07.2012

The Indian markets are poised to trade lower today tracking weak Asian session, as major cues were taken from Friday’s soft session in US markets due to lower additions in the employment report for the month of June. This has inflamed economic concerns that has actually paved for equity markets to trade lower and thus has indeed choked on Indian equities forcing them to par their mild gains that has been incurred in the previous week.

 The rate cut by ECB and China has been factored in last week, but what keeps pressure going on the equity markets too trade in the negative would be the deprecating value of the home currency and moreover with oil prices shooting back are providing concerns on the debt factors in the economy. However the monsoon climate could have provided some sort of respite in an otherwise bear market conditions.

 Nifty has its immediate support of 5290 (RISING TREND LINE) from where it’s trading at above 5300 levels; nevertheless we have to see a daily close above from its previous week top 5352, which therefore would only negate the bearish front of the market. Supports at 5292, 5270 followed by 5212. Resistance at 5337, 5352is witnessed. We firmly believe that the mild gains could be only due the factor that expectations were high on the US employment conditions, however neither an improved employment numbers nor an increased bets on QE expectations stoked equities higher that resulted in it to build a top and therefore may slide down towards 5250 levels.

View on Indian Rupee

xDirect India's USD/INR Analysis_09.07.2012

The Indian Rupee fell around 0.8% on Friday taking overall weak cues from the global markets amidst dollar demand from importers, overshadowing the sustained capital inflows into the Indian capital markets over past couple of trading sessions.
Amongst the global markets, the EUR/USD fell sharply in evening trade while the US Dollar index jumped firmly above the 83 mark after lower than expected US  data on  Jobs.  The US  Labor Department said on Friday Non-farm payrolls expanded by just 80,000 in June against expectation of 100,000 additions. This triggered a rally in US dollar and government treasury due to ultra safe heaven.
The Indian Rupee is expected to start the week on a negative as sharp drop in the US markets on Friday is and rise in the Dollar index is exerting pressure on Asian Stock and key currency markets. The EUR/USD is trading at two year lows which are further seen impacting the INR on the downside.

Report By
xDirect India
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VIEW ON MAJOR CURRENCY – 6th July, 2012

View On Major Currencies:

View On EUR/USD_xDirect India_06.07.2012

EUR/USD: The US Dollar Index rose for a second consecutive session Thursday, though this climb is still lacking for conviction (traders would use the word ‘momentum’). Taking a look at the fundamental backdrop, general risk trends tell the story. While the S&P 500 slid over the same session – boosting the greenback’s safe haven appeal – the slip follows a string of consecutive advances and did little to pull us back from a two-month high. That said, the market’s ability to hold out hope for another round of supernatural support financial support is quickly drying up. With the ECB passing up the opportunity to fortify the questionable programs trumpeted at the EU Summit, the reality of extremely low rates of return and growing threat of volatility has grown significantly brighter. Perhaps most worrisome of all for risk trends, policy authorities may be signaling their limits with a collective trend away from outright stimulus and toned-down scope of those programs actually pursued.
Mode: Bearish Supports: 1.2350, 1.2287   Resistance: 1.2433, 1.2480, 1.2525

GBP/USD: The Bank of England’s June policy decision – at which they barely avoided an increase to QE – set the stage for this week’s meeting. As expected, the group decided to increase their gilts purchases by 50 billion sterling to bring the program up to 375 billion. Yet, this is neither significantly detrimental nor encouraging to the pound. The stimulus effort by the BoE is still relatively small (compared to the Fed and ECB) and it would ultimately do little to prevent the spread of the EU crisis across the English Channel. We saw cable fell more on the ECB than BoE.
 Mode: Bearish Supports: 1.5484, 1.5450 And 1.5409 Resistance: 1.5550 and 1.5596

USD/JPY: Retail forex speculators remain extremely net-long the US Dollar (ticker: USDOLLAR) against the Japanese Yen, underlining the strength of the broader USDJPY downtrend. We would normally take a contrarian bias to retail trading crowds, and that would imply the USDJPY stands to fall further. Yet it is difficult to reconcile a US Dollar-bearish bias in light of significant developments in other USD pairs—particularly as we believe the EURUSD stands to decline further.
Since last week total long interest has fallen 13 percent while shorts are 7 percent higher. When crowds are net-long yet are no longer buying, our SSI data warns of a potential shift in trend or sideways consolidation. Our USDJPY bias is subsequently neutral in light of sentiment shifts.
Mode: Bullish Supports: 79.70, 79.55 and 78.90 Resistance: 80.20, 80.55 and 80.85



Report By
xDirect India
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Nifty & USD/INR Report- 3rd July, 2012

Daily Nifty Analysis

Nifty Analysis_03.07.2012_xDirect India

Indian equity markets snapped its winning streak however this could be only due to profit booking on the counter. Moreover domestic fundamentals has a better offering despite the fact global uncertainties loom in with Non Farm Payrolls on the horizon at the end of the week. It is such that the Prime Minister has decided to take over the responsibilities of Finance Ministry as well and therefore could provide necessary means for the reforms to take action.

Meanwhile HSBC manufacturing Purchasing Managers Index rose to 55.0 to marking a 4-month high which has increased from54.8 in May, resulting in an expansion in the economy. Markets have opened in the positive but has slipped from its high of5303 levels. We still hold the support levels of 5270 to be pivotal for it to mark as a level which if broken would result in a shortterm bearish bias. On the upside resistance of 5360-5375 still remains as an target level as long as supports of 5270 is held; nevertheless a breach would result into 5210 levels on the downside.

View on Indian Rupee

USD/INR Analysis_03.07.2012_xDirect India

The Indian posted third consecutive positive closing on Monday as market optimism led by the host of measures announced in the EU summit last week still drove markets higher. While day’s economic data from different economies came mixed, the relief rally continued in most Asian and European markets also driving decent gains inn the Asian currency space. At the Interbank exchange in Mumbai, the INR finished at 55.43 against Friday’s finish of 55.6050.  Indian stock markets dipped marginally on Monday, snapping four days of gains mainly due to profit booking in the stable FMCG sector. India’s benchmark, BSE Sensex 30 fell 0.2% to 17,398.99 points whereas broader NSE Nifty 50 fell 0.01% to 5,278.60 points.
 Indian Rupee is expected to continue trade with a positive bias tracking the moderate bullishness in the Euro and gains in most emerging markets. However this week most of the major economic data is only expected in the US session and therefore some sort of short term (intraday) momentum could be expected.

Report By
xDirect India
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