Nifty Intraday chart forming an intermediate 4th corrective wave. Why we strongly assume 8048-8040 is a 4th corrective wave. Because wave 2 = 4 and wave 4th took 0.618 of the wave 2 timing.
Dollar falls against yen after BOJ keeps monetary policy steady
The dollar slipped against the yen on Friday after the Bank of Japan stood pat on monetary policy, disappointing some speculators who had bet that the central bank would expand its already massive stimulus.
The dollar was down 0.2 percent at 120.82 yen after dipping to as low as 120.29 following the central bank’s announcement.
The BOJ decision had drawn more attention than usual after a run of downbeat Japanese indicators had fanned expectations that the central bank would increase the stimulus dosage.
Bank of Japan could send dollar toward milestone
After appreciating by 15% against the yen USDJPY, +0.21% in 2014, the dollar is up less than 1% this year. Since January, the buck has posted fresh 12-year highs against the yen on several occasions, only to retreat due to the Federal Reserve’s reluctance to raise interest rates.
Most recently, the dollar rose to a 12-year high against the yen on June 5, when it hit ¥125.77, according to FactSet data. On Thursday, a dollar bought ¥121.10, little-changed from its level late Wednesday.
The dollar’s minuscule year-to-date gains have been due to an “interlude” in the trend of monetary policy divergence.
Sterling trades above $1.52, but lags euro on soft UK data
Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.
The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 5:00am | JPY | Tokyo Core CPI y/y | -0.20% | -0.20% | |
| 8:52am | JPY | Monetary Policy Statement | |||
| 11:30am | JPY | BOJ Outlook Report | |||
| Tentative | JPY | BOJ Press Conference | |||
| 6:00pm | USD | Employment Cost Index q/q | 0.60% | 0.20% |
Explanation:- Why we assume BOJ outlook is more important because looking Japanese inflation growth numbers we assume JPY will maintain there current pace of stimulus . Hence this would be negative for JPY and positive for the equity markets.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.92 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.82 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.25 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.93 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
Pair is trading near its crucial resistance hence we expect a minor fall till 65.05-64.98 levels.
Dollar edges up near 2-1/2-month high ahead of Fed outcome
The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.
A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.
But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.
Sterling hits 8-month low vs euro as consumer prices fall
The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fuelled expectations the European Central Bank will expand or extend its asset purchase programme.
The euro fell 0.4 percent to $1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.
“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase programme from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.
“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”.
Sterling trades above $1.52, but lags euro on soft UK data
Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.
The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| All Day | EUR | German Prelim CPI m/m | -0.10% | -0.20% | |
| 1:30pm | EUR | Spanish Flash CPI y/y | -0.60% | -0.90% | |
| 2:25pm | EUR | German Unemployment Change | -4K | 2K | |
| 3:00pm | GBP | Net Lending to Individuals m/m | 4.4B | 4.3B | |
| 6:00pm | USD | Advance GDP q/q | 1.60% | 3.90% | |
| USD | Unemployment Claims | 264K | 259K | ||
| USD | Advance GDP Price Index q/q | 1.50% | 2.10% | ||
| 6:40pm | USD | FOMC Member Lockhart Speaks | FOMC Member Lockhart Speaks | ||
| 7:30pm | USD | Pending Home Sales m/m | 1.10% | -1.40% | |
Explanation:- Out of the above mentioned data , Market may react more on US unemployment numbers and Pending home sales. We assume both the data will come as per the expectations, hence this would be neutral for the USD. All eyes are on the upcoming FOMC statement.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.92 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.82 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.25 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.93 | -0.64 | 7908 | 15311 |
| Technical touch : |
Dollar Index
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Today we will discuss INR movement based on Dollar index. As seen Dollar index is forming a perfect bullish pattern on its weekly chart, and touched its above falling resistance line. We assume dollar index might fall in the coming days near its base. This would be positive for the INR for few trading sessions. Range :- 64.88-65.20
Safe-haven yen gains in cautious mood ahead of Fed
The safe-haven yen gained on Tuesday, hitting a seven-week high against the euro, as investors turned risk-averse before the start of a two-day meeting of the U.S. Federal Reserve.
Markets are pricing in only around a 7 percent chance of a U.S. rate hike this week, but they will be watching Fed Chair Janet Yellen closely for any clues to whether “lift-off” could come at its next meeting in December.
The yen had fallen last week, hitting a two-month low against the dollar after the European Central Bank said it was ready to loosen policy further and China cut interest rates again, fuelling speculation that the Bank of Japan could signal more easing at its meeting on Friday.
Euro sags as euro zone inflation turns negative in Sept
The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fuelled expectations the European Central Bank will expand or extend its asset purchase programme.
The euro fell 0.4 percent to $1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.
“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase programme from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.
“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”.
Sterling trades above $1.52, but lags euro on soft UK data
Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.
The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 5:20am | JPY | Retail Sales y/y | 0.40% | 0.80% | |
| 6:00pm | USD | Goods Trade Balance | -64.9B | -67.2B | |
| 8:00pm | USD | Crude Oil Inventories | 8.0M | ||
| 11:30pm | USD | FOMC Statement | |||
| USD | Federal Funds Rate | <0.25% | <0.25% |
Explanation:- All eyes are on the FOMC statement as there would be no change in the rate decision. But the important thing is Fed’s indication towards the December 2015 meeting. China’s weak economy may hinder rate hike. Any dovish statement by the Fed would be negative for the dollar and positive for commodities.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.98 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.89 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.63 | 0.07 | 21059 | 41217 |
| JPY/INR | 0.5398 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
USDINR pair ended on a flat notes under 65.00 levels after a lackluster trade. As said previously, pucialair is trading at its crucial rising trendline resistance. Hence we advice to go long on dips near 64.80 levels till 65.34-80 targets.
Dollar dips after rally but renewed risk appetite curbs fall
The dollar edged down from a 2-1/2-month high versus a basket of major currencies on Monday, although an increase in risk appetite in the wake of a new round of monetary easing from China limited the greenback’s losses.
Global stock markets rallied after China on Friday cut rates for the fifth time this year, just a day after the European Central Bank signalled that it was ready to increase the scale of its stimulus measures.
The benchmark 10-year U.S. Treasury note yield rose nearly 6 basis points on Friday to a 2-week high as demand for safe havens waned, providing broad support for the dollar, whose index hit 97.201, the strongest since Aug. 12.
Euro hits two-month low vs dollar as ECB weighs
The euro on Friday continued its downward trend against the dollar following European Central Bank chief Mario Draghi’s comments a day earlier that signaled further monetary easing could be on dec for the euro zone.
Europe’s common currency checked in below $1.10, hitting a low against the dollar not seen since early August, and was down 3.05 percent versus the greenback for the week. It was the euro’s worst weekly fall since May.
Pound falls to 2-week lows vs. stronger dollar
The pound fell to two-week lows against the U.S. dollar on Tuesday, as expectations for a U.S. rate hike in the coming months continued to lend broad support to the greenback.
GBP/USD hit 1.5385 during European morning trade, the pair’s lowest since May 8; the pair subsequently consolidated at 1.5415, sliding 0.36%. Cable was likely to find support at 1.5241, the low of May 8 and resistance at 1.5591, the high of May 20. The dollar was boosted after Federal Reserve Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later in the year if the economy continues to improve as expected.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 2:30pm | EUR | M3 Money Supply y/y | 5.00% | 4.80% | |
| 3:00pm | GBP | Prelim GDP q/q | 0.60% | 0.70% | |
| 6:00pm | USD | Core Durable Goods Orders m/m | 0.00% | -0.20% | |
| USD | Durable Goods Orders m/m | -1.10% | -2.30% | ||
| 7:30pm | USD | CB Consumer Confidence | 102.5 | 103 |
Explanation :- Out of the above mentioned data Consumer confidence is the most important data which may impact the USD mostly. We assume data might come negative which would be negative for USD.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.92 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.52 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.51 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.64 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
Pair touched its crucial trendline support and formed an Hammer at daily pattern. We assume a bounce till 65.24 levels with a strong support at 64.70 levels.
Daily chart
As seen from the chart, the stock has pierced its Ascending triangle and trading near its crucial or we can say a rock solid resistance at 274 levels. But what is more importance is below volume characteristics.
Volume pierced its last 4 weeks average daily volume. Hence we advise to go long above 272-74 til 284-290-296 levels with SL near 266 closing
Gold:Dow ratio
Above chart witnessing a relative comparison chart between Gold and Dow Jones Industrial index. As seen, after a steep sell off since so many months, finally price and Momentum indicator has given some positive signs. Ratio pierced its 50 and 200 d SMA and finding its support near that levels. But what is more intresting is , below RSI . RSI went into an Mega overbought region, this shows Gold to outperform DJIA in the coming months.
Gold stocks( HUI): Gold ratio
This chart covers nearly 16 months of gold and gold-stock price history, a long secular span that witnessed virtually every kind of market condition imaginable. This ranged from mighty gold-stock bulls to a once-in-a-century general-stock-market panic. And throughout all of that, good times and bad alike, the gold stocks were always priced much higher relative to the metal that drives their profits and hence ultimately stock prices. For the better picture we added correlation line under the ratio which depicts more then 90% positive correlation. Again a leading indicator for the Gold price.
Dow industrial vs Dow transportation
For the further clarity we added DJIA and DJTA. As per the Dow theory “Averages must be confirm”. Above in red line ( DJTA ) is still struggling to cross its intermediate highs of 8215 levels whereas on the other side DJIA ( in blue line) has crossed and trading above its intermediate high. This indicates a divergence. This doesn’t mean an absolute sell for the DJIA . But looking at the past history, DJTA is considered as the leading sign.
Hence above analysis is indicating a positive sign for the Gold price in the coming sessions and minor sell off in the equity market.
