Indian Rupee has shown weakness during this entire year (previous post) which was quite normal bcoz of the RBI buying gold instead of the dollar swaps for the trade deficits (i.e exports,imports) in 2009.Here, we have the data for the USDINR pairs which hit the initial upper price band around 57, And trying to consolidate in near future but this consolidation is showing some strength in the rupee which is good for import, And this is building a lower channel trend here which has immediate resistance around 56, And the downside would be around 52 which will be due sometime in Q4 of this year.Once this consolidation is finished this will gain the momentum to target to all time high again, And if that's breached then we will have target of 66, then over new normal on Indian rupee will be around 55.
EUR USD Currency Pair-
This pair is showing more weakness when considereded to USD, And that in turn does not suggests that USD is strong.All the traders are trying to do is jumping from EUR to USD boat, And thats a safe heaven play but once the USD chicken come to roost then it will sink like a titanic which will not only effect the US but bring all the rest of FIAT CURRENCIES along with it.
EUR is the main concern here, the deep pocket players are trying to short this pig as there is no tomorrow for the EURO Zone as the Open Interest is rising pretty quickly.EUR is going to decide the equities markets as euro implodes so does the rest of the globex equities goes as dollar strengthens but this will be a temporary deflationary forces on the credit markets but when you look closely in the real natural resources where there is shortage of supply side economies which will eventually explode to higher side espl on soft and hard commodities.Take a look at this chart
