European stocks surge in risk-on trade, financials lead; Dax up 2.95%

 European stocks surged on Monday, as concerns over a potential British exit from the European Union, or Brexit, eased and as rising oil prices lent support to the energy sector.

During European morning trade, the EURO STOXX 50 soared 3.14%, France’s CAC 40 -rallied 2.76%, while Germany’s DAX 30 surged 2.95%.

Brexit concerns subsided after two opinion polls published on Saturday showed that support for the 'Remain' campaign had regained its lead over a vote to leave, while a third showed momentum shifting in favor of a vote to remain in the 28 member bloc.

BUY JPYINR ABOVE 64.45 TGT -64.55-64.65-64.75 SL 64.25 BELOW

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SELL GBPINR BELOW 95.40 TGT 95.30-95.20-95.10 SL 95.60 ABOVE CMP 95.41

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Dollar hits two-week low against yen

The dollar hit a two-week low against the safe-haven yen on Thursday, weighed down by uncertainty over whether the U.S. Federal Reserve will raise interest rates in June or July.

Strategists said comments from Bank of Japan board member Takehiro Sato, who said on Thursday he was opposed to deepening negative interest rates, had lifted the yen, which was already trading strongly on the back of subdued risk sentiment across markets.

The dollar was down half a percent by 0740 GMT at 108.99 yen, having earlier touched 108.825 yen, its lowest for two weeks. That was around 2.5 percent weaker than a one-month high of 111.455 yen set on Monday.

The European Central Bank will at 1145 GMT publish its latest interest rate decision, with no change expected, followed by a press conference with ECB chief Mario Draghi at 1230 GMT.

The euro rose 0.3 percent to $1.1221, its highest in nine days, lifted by market expectations that the ECB will raise growth and inflation forecasts, a rare positive step even as it emphasises persistent negative risks and a readiness to provide more stimulus.

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TRADE NIVESH FOREX TRADING TIPS FOR 23 MAY 2016

“USD/JPY is probing the 55 day ma at 110.31 but will need a close above the 111.90 last reaction high to confirm that the market has based (favored)”.

“We note the TD perfected set up and 13 count on the 240 minute chart and we may see a minor set back very near term, but we look for dips to hold over 107.65”.

“The sharp drop last Friday was unexpected and the 1.4488 low was just a few pips above our 1.4485 stop-loss”.

“Unless GBP can move and stay above 1.4580 within these couple of days, a break below 1.4485 seems likely”.

“In other words, the recent high 1.4663 is likely the extent of the current bullish phase and the target of 1.4770 is not met”.

BUY GBPINR ABOVE 97.90 TGT -98-98.10-98.20 SL 97.70 BELOW CMP 97.84

SELL USDINR BELOW 67.35 TGT 67.25-67.15-67.05 SL 67.55 ABOVE CMP 67.38



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CURRENCY FUTURES TRADES STRONGER, OI DECLINES BY 0.67%

The partially convertible rupee is currently trading flat compared to its Thursday’s close at 67.36. The rupee opened at 67.38 and touched day’s high of 67.4050 and low of 67.3150.

The May currency future was trading at 67.4425 with a spread of 0.0050 and a volume of 370515. The contract opened weaker at 67.52 compared to its previous closing of 67.4550. 

The open interest (OI) stood at 1,558,878 down by 0.67% compared to its previous close of 1,569,406.

The rupee had closed at 67.36 on Thursday, while the Reserve Bank of India’s (RBI) reference rate stood at 67.2307.

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