Monday, May 16, 2011

Forex market update

The US dollar gained v/s the Indian rupee during the morning session today and currently trading around 45.17 as US dollar gained sharply on risk aversion.  The EURUSD dropped on New York session to 1.4050 after advancing towards 1.43 during the mid European session. The pair is currently at the Friday’s low in Asia which has caused the EURINR May contract to slide towards 63.50 levels.

The International Monetary Fund and European Union finance ministers were slated to meet late Monday. They were expected to ratify the Portuguese bailout and may adjust loan conditions for Ireland, as well as consider the situation in Greece. However, the arrest of Dominique Strauss-Kahn, managing director of the IMF, on sexual-assault charges in New York on Saturday, and reports that the incident will prompt his resignation, has fuelled fresh uncertainty about the progress of resolving Europe’s debt concerns. Read more about the IMF chief’s possible resignation.

The EURUSD is likely to decline towards 1.37 levels if rates manage to hold below 1.40 levels. This may push the EURINR lower towards 63.20-63.00 levels in the short term. While in case of USDINR may be holding firm in such scenario.

In case of GBINR is expected to stay weak tracking Euro while decline may be limited with gains in USDINR pair.  The 72.50 is a important support for the short term.

For the day, the USDINR May contract is expected to stay firm with immediate resistance at 45.20 and then 45.35 levels. Supports are seen at 45.09 and then 44.97 levels.

In case of EURINR, there is a possibility of sideways move today with immediate support at 63.40 levels. Resistance is seen at 63.80 levels. The GBPINR is expected to see range bound move with immediate support at 72.90 and resistance at 73.30 levels.

The Japanese Yen is likely to stay firm as long as it holds the intraday support of 55.55 levels. The resistance is seen at 55.95-56.-00 levels.

No comments: