Forex Mantra

July 11, 2011

Trade recommendation
Currency USD-INR EUR-INR GBP-INR JPY-INR Strategy Sell Sell Buy Buy Levels 44.55 63.55 70.90 54.60 Target 44.20 63.00 71.30 55.10 Stop-Loss 44.75 63.85 70.70 54.35

MCX-SX High INR USD July USD Aug EUR July EUR Aug GBP July GBP Aug JPY July JPY Aug NSE FX High INR USD July USD Aug EUR July EUR Aug GBP July GBP Aug JPY July JPY Aug Spot Rates EUR-USD GBP_USD USD-JPY Dollar index RBI Reference rates USD-INR EUR-INR GBP-INR JPY-INR Equity Indices Nifty Sensex Dow Jones FTSE Benchmark rates MIBOR (%) LIBOR (%) Call rates (%) Forex reserves (US$bn) Close 6.06 0.46 6.60 300.00 Close 5,729 19,078 12,719 6,055 Pr Close 5,626 18,727 12,626 6,003 Chg 1.84 1.88 0.74 0.86 Rate (INR) 44.3263 63.6456 70.7448 54.55 Pr Close 44.4173 63.6291 70.9522 54.86 %Chg (0.2049) 0.0259 (0.2923) (0.5651) High 1.4369 1.5981 81.3200 74.9800 Low 1.4344 1.5956 81.1900 74.8800 Close 1.4353 1.5964 81.2400 74.9400 %Chg (0.04) (0.03) 0.02 (0.03) 44.5100 44.7625 63.8475 64.1350 71.0875 71.4800 54.7950 55.0700 44.4325 44.6900 63.3200 63.6250 70.9275 71.2725 54.6300 54.9000 44.4600 44.7075 63.4000 63.6950 70.9825 71.3075 54.6350 54.9000 (0.26) (0.25) (0.45) (0.44) (0.43) (0.45) (0.76) (0.74) 1,451,792 806,673 56,976 19,794 30,859 2,457 10,845 2,131 Low Close %Chg OI 44.5100 44.7700 63.8500 64.1400 71.1000 71.4300 54.8000 55.0600 44.4300 44.6900 63.3325 63.6300 70.9250 71.2725 54.5675 54.8800 44.4625 44.7075 63.3950 63.9825 70.9800 71.3200 54.6375 54.8800 (0.26) (0.26) (0.46) (0.47) (0.43) (0.44) (0.76) (0.79) 750,385 247,722 46,950 12,960 59,894 3,927 9,539 2,040 Low Close %Chg OI

Fundamentals View
USD-INR

Shrugging off the weakness in local equities, the rupee on Friday gained more than 10 paisa to close at a 10-week high of 44.3250/3350 against the US currency due to sustained dollar selling amid hectic capital inflows. Foreign Institutional Investors (FIIs) picked up shares worth more than $2.4bn in eleven days since June 23, which mainly kept the rupee strong recently. The Bombay Stock Exchange benchmark Sensex tumbled by over 220 points or 1.15%, but could not adversely impact the rupee. Exporters and some banks preferred to sell dollars at current exchange rates in the light of persistent capital inflows from foreign funds into the equity market.

Cross-currencies

Dollar Index, which measures the performance of dollar against six major currencies was last seen up, +0.355%. The US Labor Department's closely watched employment report last Friday which showed nonfarm payrolls rose by only 18,000, the weakest reading since September and well below economists' expectations of a 90,000 rise. The unemployment rate climbed to 9.2% in June from 9.1% in May. The euro was down 1.9% against the dollar this week, while the dollar was down 0.2% against the yen. On a positive note for the euro zone economy, German industrial production figures showed an impressive uptick, staving off fears of a slowdown in the euro zone core for the time being. While interest rate differentials continue to favor the euro and are a primary reason for its 6.7% gain against the dollar year-to-date, concerns about Europe's sovereign debt crisis are an obstacle.

Forex Mantra

Technical View
USD-INR Chart shows that price is possibly forming a falling wedge or diagonal triangle pattern, which could end near 44.15/43.95 region. Upticks to 44.50/55 could get capped for the day. MCX USD-INR Chart shows that price is possibly forming a falling wedge or diagonal triangle pattern, which could end near 44.35/44.10 region. Upticks to 44.65/70 will find good resistance. EUR-USD (1.4225): Resistance at 1.4305/ 4330 could cap advances for a decline towards 1.4110. It has to rise above 1.4390 to clear above a hurdle that is preventing it from going for 1.4480. Structure favors a decline. GBP-USD (1.6025): Daily chart shows a chance to recover towards 1.6130/80. It has to rise above 1.6220 to turn bullish for a rise towards 1.6300. However, bigger picture continues to show 1.5775 as the more probable target while price stays below 1.6180. USD-JPY (80.70): Important support is at 80.45 now. While this level holds, there could be a possibility of a move towards 81.00 levels. Price structure now favors a fall towards 80.25 or even lower now.

USD/INR

EUR-USD

INR Cross currency view

MCXSX EURINR July (Close: 63.40): Rallies to 63.65-70 is expected to find good resistance for a decline below 63.00 in the coming sessions. MCX GBPINR July (Close: 70.98): Near-term support is at 70.85-95 zone. Any dips to here could find strong support for a pullback towards 71.25. However, overall picture looks weak for a fall towards 70.45 or even lower. MCX JPYINR July (Close: 54.63): As expected we saw a decline towards 54.65 levels. Resistances are now at 54.95-55.10 levels or even higher towards 55.25 levels. Favored view expects support to 54.65-75 to hold for a rally towards 55.50 levels now.

DOLLAR INDEX

Forex Mantra

Forex Mantra

Pivot table
Commodity USD-INR EUR-INR GBP-INR JPY-INR EUR-USD GBP-USD USD-JPY R2 44.5475 64.0433 71.1767 54.9008 1.4380 1.5992 81.3800 R1 44.5050 63.6474 71.0428 54.7230 1.4361 1.5973 81.2806 MCX Levels Pivot 44.4675 63.5258 71.0017 54.6683 1.4355 1.5967 81.2500 S1 44.4250 63.2017 70.9033 54.5367 1.4342 1.5953 81.1800 S2 44.3875 63.0083 70.8267 54.4358 1.4330 1.5942 81.1200

Important data to watch

Date Country / Currency USD 08-Jul USD USD USD AUD 11-Jul EUR CAD CAD Event Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m Wholesale Inventories m/m Home Loans m/m French Industrial Production m/m Housing Starts BOC Business Outlook Survey IST 18:00 18:00 18:00 19:30 7:00 12:15 17:45 20:00 Actual 18K 9.20% 0.00% 1.80% Cons. 87K 9.10% 0.20% 0.60% 4.60% 0.50% 182K Previous 54K 9.10% 0.30% 0.80% 4.80% -0.30% 184K

Forward rates Premium/Discount

USD-INR
Detail Bid Ask

GBP-USD
Detail Bid Ask

1 Month 3 Month 6 Month EUR-USD

Detail

15.6300 54.0000 110.0000

20.5000 60.5000 119.1000

1 Month 3 Month 6 Month USD-JPY

-63.8000 -182.9000 -362.3000

-62.2000 -178.9000 -352.3000

Bid

Ask

Detail

Bid

Ask

1 Month 3 Month 6 Month

-13.6000 -38.4000 -81.2600

-12.2000 -37.7000 -79.8200

1 Month 3 Month 6 Month

-1.5900 -5.2100 -17.7300

-1.4700 -4.9100 -16.7500

Note: Ideas given under the Commodities section are for intraday purpose or up to a period of three trading sessions. Recommendations under this heading are not necessarily part of our fundamental buy or sell list.

Forex Mantra

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