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Sell EURINR; target of : 84.90 : ICICI Direct

Sell EURINR; target of : 84.90 : ICICI Direct
December 07
11:09 2021

ICICI Direct, The Euro appreciated by 0.33% yesterday mainly on the back of weakness in dollar and improved economic data from the Euro Area.

December 07, 2021 / 08:35 AM IST

ICICI Direct’s currency report on EURINR

The Euro appreciated by 0.33% yesterday mainly on the back of weakness in dollar and improved economic data from the Euro Area. However, sharp upside was capped on dovish statements from ECB policymakers and risk aversion in the global markets. Although eurozone inflation is now more than twice the ECB’s 2% target it is unlikely to trigger monetary tightening as most policymakers are of the view that it is transitory. CPI data showed inflation accelerated to 4.9% in November, highest level in 25 years on dovish statements from ECB policymaker • The Euro is expected to trade with a negative bias amid strong dollar, pessimistic global market sentiments and divergence in monetary policy. Further, concern over onset of new variant when EU countries are already tightening rules to try to curb the spread of Coronavirus will hurt the single currency. Euro area CPI data showed inflation remained elevated in November but markets still expect ECB to continue its easy money policy as growth in the region lags and policymakers believe the recent surge in inflation is transitory and would start easing next year • The pound depreciated by 0.14% yesterday on risk aversion in the global markets and on fears that Bank of England may not hike rates in December meeting amid concerns over new Coronavirus variant. Further, concerns over a resurgence in Covid-19 cases in the country continued to hurt the currency • The pound is expected to trade with a negative bias on strong dollar and pessimistic global market sentiments. Further, investors fear that rising Covid-19 cases in the country and possibility of new restrictions to combat Omicron variant will hurt economic recovery and push back early rate hike expectations. Additionally, market participants will remain vigilant ahead of Bank of England Governor Andrew Bailey’s speech and US Fed Chair Powell’s testimony before the House Financial Services Committee. GBPINR (December) is expected to trade in a range of 99.70-100.30

Intra-day strategy 

EURINR December futures contract (NSE)
Sell EURINR in the range of 85.18-85.20
Target: 84.90Stop Loss: 85.35
 Support: 85.00/84.90Resistance: 85.35/85.45

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