USD/INR: Rupee had a bullish close at 53.48 (above immediate objective at 53.40-53.30) sharply up from intra-day low of 53.89. The undertone is bullish for extension into 53.00-52.90. The risk factor now is possible reversal in EUR/USD from either 1.3065-1.3090 or 1.3145-1.3170. Continue to hold “short” entered at 53.80 and will review tomorrow.
NIFTY: The intra-day trades were to the script; held well at buy zone of 5660-5630 (low of 5658) for gradual move into immediate resistance at 5700-5730 (high of 5721), and close of day at 5717 provides good comfort to the bulls. No change in weekly outlook for extended gains into 5730-5750 ahead of 5800-5830 while 5680-5660 stays firm.
10Y Bond yield stayed rock solid above 8.12% while OIS rates little changed above 7.59% (1Y) and 6.97% (5Y). No change in view of tight consolidation at 7.57-7.62 and 6.97-7.02; test/break either-way will trigger our trades. No change in view in 10Y Bond looking for consolidation at 8.12-8.15%; test/break either-way will trigger our trade.
FX premium remained bid above set pay zone of 6.25-6.10% (3M) and 5.35-5.25% (12M) before close at 6.4% and 5.5% respectively. Will continue to watch 6.10-6.60% (3M) and 5.35-5.65% (12M); test/break either-way not expected to sustain.
USD/JPY has traded end-to-end of 79-80 (low of 79.23 and high of 79.86) and it would need conclusive break of 80.00 for extended gains into 80.50-80.65. If not, consolidation play at 79-80 will get extended before setting up directional break-out either into 80.50 or 78.00. Strategy is to buy at 79.20-78.95 with tight stop for 79.95/80.45.
EUR/USD recovered nicely from 1.3025-1.3000 support into 1.3065-1.3090; break of which will trigger extension into 1.3140-1.3170 but momentum is not seen to be good for this move although is not ruled out. Even if it does, there is higher probability of strong reversal from 1.3140-1.3170 which could take out 1.3010-1.2985 strong support.
Have a great evening ahead.................................Moses Harding
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