Forex Technical Update

Euro: Euro crashed more than 400 pips to test the bids of 1.4007 in yesterday's session and is currently trading around 1.4120 levels. Immediate resistance comes in at the 21 hourly EMA at 1.4166. A break of this level may take Euro higher upto 1.4330 levels (21 4-hourly EMA and 38.2% Retracement of the recent fall). The 4-hourly stochastic is turning in the oversold region hence a slight pullback from current levels cannot be ruled out, however the other major stochastic is signalling selling pressure. (Eur/Usd:1.4125).

Pound: Cable lost more than 600 pips in the last two trading session as it came under pressure testing the bids at 1.7755 yesterday at the back of stronger Consumer Confidence and Chicago PMI of the US. Currently trading around 1.78 levels, slight downside cannot be ruled out as the hourly charts indicate selling pressure. However, with daily and 4-hourly charts reaching the oversold territory, downside could be contained around 1.75 levels. Although the overall sentiment remains bearish for the pair, avoid initiating positions at current levels. (Gbp/Usd: 1.7808)

Yen : Usd/Jpy pair recovered most of its losses yesterday as it surged to touch the highs of 106.50 levels from 103.49 levels. Although the 4-Hourly stochastic is overbought, the daily and hourly stochastic are still showing buying pressure and can bring a rally upto 107 levels (100 & 200 Daily EMA & 200 4-hourly EMA). (Usd/Jpy 105.90)

Rupee: Rupee that made a fresh 5 year low today touching 47.24 made a comeback as the state-run banks sold dollars heavily bring rupee to 47 levels. The local currency fell almost 17% this calendar year. Looking at the meltdown on stocks & heavy withdrawal of foreign funds from Indian shares can give rupee a broad range of 46.70 - 47.40 though RBI intervention can be observed anytime. One-month non-deliverable forwards were at 47.23/47.33 per dollar, weaker than the onshore rate. (Usd/Inr: 47.03)

Swiss Franc: Usd/Chf pair witnessed a rally of 350 pips in yesterday's trading session touching a high of 1.1246 and a low of 1.0886. Immediate support for this pair is expected at at 1.1140 levels (21 hourly EMA). A break of this level on the downside may take it further to 1.10 levels (21 daily EMA). On the upside strong resistance is witnessed at 1.13 levels (100 weekly EMA) as the 4-hourly and daily stochastic is reaching the overbought territory. (Usd/Chf: 1.1180)

Australian Dollar: Aussie slipped around 250 pips from the days highs and made a low of 0.7864. Immediate resistance for this pair comes in at the 55 hourly EMA at 0.8052. On the downside the previous low of 0.7797 could be an important support with the daily and 4-hourly charts reaching oversold region. However, a decisive break of this level may push Aussie to 0.7581 levels (100 monthly EMA). (Aud/Usd-0.7980).

Gold: Gold experienced yet another volatile session yesterday as it plummeted $58 to test the bids at $856.70. The hourly stochastic is correcting to overbought region whereas the 4-hourly chart is showing buying pressure. Immediate resistance for the commodity is seen at $891.44 (61.8% Retracement from the low of $735.60) breaking which can take the yellow metal to $900 levels whereas the downside could be curbed around $854 (cluster supports of the EMA's of the daily and 4-hourly charts). Initiate longs there for $10-12 gain. (Gold: $878.65).

Dollar index : Dollar index has further strengthened and is currently trading at 79.20 levels with the stochastic poised at 56.25%.

India Forex
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DISCLAIMER

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.