Currency Insight ( May 20, 2015)

EUR/USD back above 1.1100

The shared currency halted its declines and recovered from session lows against American dollar in the European morning, with EUR/USD regaining 1.11 handle. However, the major remains pressured largely on the back of a broadly stronger greenback, which added to previous gains on the back of upbeat US data. Markets are now focusing on FOMC minutes amid a data-dry EUR calendar.

GBP/USD keeps losses below 1.55 ahead of BOE minutes

The British pound maintained an offered tone against the American dollar in the European morning, with GBP/USD recovering partial losses, mainly driven by the rising US dollar across the board boosted by the latest US fundamentals. While traders await Bank of England (BoE) minutes due later in the session, although the tone is expected to be rather neutral which may not create much volatility.

Lanka reserves expected to boost from Indian currency swap

Sri Lanka’s official reserves are set to receive a boost by the currency swap arrangement with India, signed during Prime Minister Narendra Modi’s visit, the country’s Central Bank said today.

During his visit to Sri Lanka last month, Prime Minister Modi had pledged USD 1.5 billion in financial assistance on a currency swap arrangement. The Reserve Bank of India and Central Bank of Sri Lanka agreement will help Sri Lanka keep its Rupee stable. The Sri Lankan Rupee has been under pressure since early January and has fell around 1.5 per cent so far this year despite Central Bank action to sell dollars to defend it.

Rupee third on fake foreign currency list in Switzerland!

With Switzerland remaining in focus in India’s fight against black money stashed abroad, the quantum of counterfeit Indian rupee seized by Swiss Police is third highest among all foreign currencies despite a sharp fall from the previous year.

As per the latest ‘counterfeit statistics’ released by the the Federal Office of Police (Fedpol), the total number of counterfeit Indian rupee notes seized during 2014 stood at 181, down from 403 in the previous year.  This is third highest among all foreign currencies after the euro (2,860) and the US dollar (1,101).

Important events and their explanation:
Time ( IST) Currency Economic Data Expectation Previous
6:30 AM JPY Prelim GDP q/q 0.40% 0.40%
1:30pm USD FOMC Member Evans Speaks
 3:00pm GBP MPC Official Bank Rate Votes 0-0-9 0-0-9
  GBP MPC Asset Purchase Facility Votes 0-0-9 0-0-9
9:00pm USD Crude Oil Inventories -1.3M -2.2M


JPY –  If Actual comes better than forecast , good for JPY and for the market

GBP –  We expect it to remain same, any change would create significant impact on GBP.

USD-  If Actual comes better than forecast , positive for dollar and negative for crude.

Technical touch :


As seen pair has pierced its prolonged weekly symmetrical triangle , where price is about throwback till its falling trend line support levels which is 63.10-63.20 levels.

For the next few sessions we assume pair might remain in a band of 63.96– 63.40 levels.

Support is expected to be around 63.40/50 levels and resistance 64.00/30 levels.



After a prolonged downtrend pair tried to form its base and RSI moved into bullish territory.

As seen RSI is trading near its rising trend line. Hence we assume INR might appreciate till 70.55/40 levels

Support is expected to be around 70.38/69.90  levels and resistance 71.63/78  levels.