October 28, 2016

Mtechtips MCX-SX USDINR INTRADAY trading analysis 22-09-2016
MTECHTIPS Dollar/Rupee down on post Fed outcome and India Apr-Jun CAD narrows
Dollar/rupee open down and trading at 66.9075 compare to previous close of 67.0850 levels while the dollar index fell Thursday as the Federal Reserve’s monetary policy kept its benchmark interest rates unchanged for the sixth consecutive policy.Technical, as per the sell strategy USDINR was able to test predicted level 66.90. Now immediate support is seen at 66.85 and pair would need to trade below this level on order to test 66.65-66.52.Else, any rise towards 67.10-67.15 expect to attract short term sell. On the upside, strong resistance is seen at 67.25 on closing basis sustain trade above only will expect to test 67.45-67.65.The greenback fell sharply after the Federal Reserve left short term interest rates unchanged at 0.25% to 0.50%, the level it’s been at since last December Wednesday and signalled that it still expect to raise them before year-end.The vote was 7-3/ with three FOMC members wanting to raise rates. Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester, and Boston Fed Chief Eric Rosengren signalled their preference for tightening the moneatry policy. It was the first time since Dec 2014 that three FOMC members have dissented from a decision.”The (Fed) judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives,” said the Fed policy in its statement.Meanwhile, Fed officials also projected that they still believe they’ll raise rates one more time in 2016.Adding to that, Fed lowered its economic projections despite offering n encouraging assessment of the labour market. The Fed lowered its estimate of the economy’s annual growth potential from 2.0% to 1.8%.Fed-fund futures, used by investors to bet on central-bank policy, suggest a 55% chance of a rate increase by the Fed’s December meeting, as on Wednesday, down slightly from 58% before the announcement, according to CME Group.However, Bank of Japan left its key deposit rate unchanged at minus 0.1%, revising its policy framework by setting a 10-year interest rate target to step up its fight against deflation after the existing measures failed to achieve 2% inflation in the promised two-year time frame.Bank of Japan said it would start target 10-year interest rates, committing to keep them around zero as part of a new policy framework aimed at stoking inflation.Adding to this, India’s current account deficit narrowed in the first quarter of the fiscal year ending Mar 31, 2017 led by a lower trade deficit helped by lower oil prices and fewer gold imports, data showed Wednesday.Current account deficit narrowed to $0.3 billion, or 0.1% of GDP in the Apr-Jun quarter compared with $0.3 billion or 0.1% of GDP in the previous quarter and $6.1 billon or 1.2% of GDP in the first quarter of the previous fiscal year, data released by the Reserve Bank of India showed.


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