Thursday, 13 April 2017

Nifty May Open Subdued Following “Risk Off” Trade After Trump’s Jawboning For A Weaker USD And Lingering Geopolitical Concerns; All Eyes May Be Now On Infy’s Guidance & Report Card After Tepid IIP & Higher CPI



Market Mantra: 13/04/2017 (08:30)

SGX-NF: 9195 (-31 points)

Key support for NF: 9170/9150-9115/9085

Key resistance for NF: 9215-9255 & 9280-9315

Key support for BNF: 21675-21450

Key resistance for BNF: 21775-21875

As par early SGX indication, Nifty Fut (Apr) may open around 9195, slightly gap down following tepid/mixed global cues amid lingering geopolitical tensions and Trump’s jawboning about a weaker USD. Yesterday Trump commented that USD is very strong and he will like to see it weaker wrt other major currencies and also commented that he likes to lower Fed rate in a complete about turn of his previous election rhetoric. He also indicated to fill up the current vacant positions in FOMC with some dovish members and Yellen, being an original dove, she may also get an extension next year. Trump also indicated that China will not be leveled officially as “currency manipulator” by US, because China will help to diffuse tension with NK for a favourable trade deal with US.

Thus, all these efforts to talk down the USD tactics by Trump, specially his comments about US Fed rate & dovish FOMC members has put significant pressure on USD & risk trade is off (USD now becomes a risk or reflation currency after Trumpism contrary to earlier perceptions of a safe haven currency). Subsequently, USDJPY has broken the important level of 109 and now eyeing the next 107 level; Japanese market (Nikkei) is down.

China’s Yuan has gained following Trump’s unwillingness to label it as “currency manipulator”, PBOC’s liquidity injection after nearly two weeks and an upbeat trade balance data (both export & import data flashed much above estimate). China’s market is trading in positive zone. Contrary to China, US/Trump & Co may now be levelled as a great manupulator of its currency (USD).

Back to home, all eyes will be on Infy’s report card today, which is just flashed and at a glance, Q4 results may be at par street estimates. Market may look now for its guidance.


Hints for actionable trading idea: Nifty & Bank Nifty Fut

Time & Price action suggests that, Nifty Fut (Apr) has to sustain over 9170 area for further rally towards 9215-9255 & 9280-9315 for the day/in the short term (under bullish case scenario).

On the other side, sustaining below 9150 area, NF may fall towards 9115-9085 & 9040-8985 area for the day/ in the short term (under bear case scenario).

Similarly, BNF has to sustain over 21825 area for further rally towards 21875-21975 & 22050-22150 area in the near term (under bullish case scenario).

On the other side, sustaining below 21775 area, BNF may fall towards 21650-21550 & 21450-21340 area in the near term (under bear case scenario).



 SGX-NF

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