Currency Insight

EUR/USD drops further to 1.1450

After hitting fresh multi-week tops in the boundaries of 1.1300 the figure overnight, the pair has surrendered part of those gains and has returned to the 1.1250/45 area in response to the mixed preliminary PMIs from France and Germany.

Spot continues to derive support from diminishing market expectations of a Fed’s lift-off in September – now with December as the most likely candidate – following the dovish tone from the FOMC minutes on Wednesday.
On the Greek front, market participants perceive Tsipras stepping down as EUR-supportive as well, as that could facilitate the negotiations with the international creditors. .

GBP/USD: Breakout turns into Fakeout, drops to 1.5650

The spot turned lower from the 7-week high of 1.5819 seen on Tuesday after China’s rate cut pushed the markets into stabilization mode. The USD was ditched on Monday, leading to an upside breakout in the GBP/USD pair from the multi-week range of 1.5460-1.5690 levels.

The focus now shifts to the US durable goods figure for July. The market expects the headline figure to print at -0.4% from June’s 3.4%. However, the markets would be more interested to see if core durable goods have ticked higher .

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
1:30pm EUR M3 Money Supply y/y 4.90% 5.00%
6:00pm USD Prelim GDP q/q 3.20% 2.30%
USD Unemployment Claims 275K 277K
7:30pm USD Pending Home Sales m/m 1.30% -1.80%

Explanation:- After a dramatic last week, Dollar tried to maintain its lost ground. We assume US data’s might meet the street s expectation , hence expect a minor depreciate in the dollar till 1.1520.

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 66.12 0.17 788526 960103
EUR/INR 75.77 -0.82 37048 48836
GBP/INR 103.54 0.07 21059 41217
JPY/INR 55.42 -0.64 7908 15311
Technical touch :

USDINR pair touched its 2015 lows and fell till 67 levels but soothe after the RBI intervention. As seen weekly chart forming a shooting start pattern, this pattern is running hence we will wait till 66.35 levels. Is pair is able to close near 66.10 levels, . If this happens, USDINR might fall till 65.50 levels.