JKD VIEWPOINT: WEEKLY CURRENCY OUTLOOK (08/03/2010)

WEEKLY CURRENCY OUTLOOK (08/03/2010)

*USD-INR:-* It has breached the support of 45.90 & closed lower against our expectation. Now the 45.90 will act as resistance for any up move. For the coming week we are expecting a pull back to 45.80-45.90 range & then down move should continue which should find support at 45.35 & 45.15.
*EURO-INR:-* It has declined from 70.50 to 61.74 & still there is no sign of recovery visible in terms of momentum or corrective bounce. However in our estimate it should now bounce back to 65.00 levels as all the oscillators are strongly diverging.
*GBP-INR:-* It has declined very swiftly from 75.52 to 68.08.We are expecting equally swift corrective rally to 71.50-72.00 in coming weeks.
*JPY-INR:-* It has entered a strong downtrend with the breach of 51.00.We do not see it crossing 50.50 on up side & down side first support lies at 49.35 & eventually it will reach to 48.65.
*EURO-USD:-* Last week it has hit the bottom of 1.3434 & bounced off swiftly to 1.3736 level. In our estimate the target of this rally is 1.4005 if it is able to cross the hurdle of 1.3870.Since it is in downtrend for last two months & oversold it may bounce substantially.
*GBP-USD:-* In accelerated terminal mode of decline it made the low of 1.4784 against our expectation of 1.4850.However it has reversed from 1.4784 & bounced off swiftly to mark the high of the week at 1.5166. In our estimate this rally will be equally swift & stupendous & set the target of 1.5625 in coming 3-4 weeks time.
*USD-JPY:-* It has the good support at 89.50-89.80 range. We expect a corrective bounce to emerge from this level which should ideally test the 92.00-92.25 levels in coming 2-3 weeks.
*DOLLAR-INDEX:-* It has formed the intermediate term top at 81.42 & entered the corrective declining mode. We do not see any bounce above 80.90 & downside 79.70 & 79.00 are good supports.