Expect an explosive move in euro soon: Commtrendz Research

The Indian currency has been having a fairly good week considering the fact that crude has been reaching higher highs. The onslaught on the Indian currency has not been much.

In an interview with CNBC-TV18, T Gnanasekar, director Commtrendz Research & Fund Management, spoke about his reading of the currency/commodities market and the road ahead.

Below is a verbatim transcript of the interview. Also watch the video.

Q: What would be an intraday view on currency futures and then we will come to a slightly longer-term view?

A: Intraday view would be to sell on rallies. We are looking at 45.20-45.25 or thereabouts as good resistances where one can sell. Yesterday also we saw it coming close to that and failing there. My sense is it's a sell because the way the stocks have performed and the way euro had risen overnight.

All this is hinting towards a move towards a 44.95, 90 levels. I would sell at 45.25 for a target of 44.90.

Q: Coming to the slightly longer-term view, what would say the view over the next two weeks be for instance or may be for that matter the March contract? Would you expect that you are going to see the 44.80 resistance level also getting broken on the downside?

A: At this point of time, I am very unsure whether to call for a break of that level because still crude oil price rise is going to keep the market little uncomfortable. That's going to support the prices at lower levels. But looking at the way the stocks have moved and looking at the all other factors, it's possible that it might break, but then it's ideal to buy there rather than expect a break.

I would buy there with a small stop loss.

Q: We will come to crude in a bit and your strategy there as well, but the euro has seen an explosive rally after those comments from ECB about possible hikes in interest rates etc. What's the strategy there on the euro-rupee?

A: Euro-rupee now is clearly a buy on dips both the chart picture and the fundamental picture. The way Fed has maintained that they would not hike rates and ECB on the other hand has gone ahead and then hinted that anti-inflation rhetoric, so my own sense is it's going to really result in an explosive move.

In the euro against dollar we are looking at a close to 1.42 to 1.43, which means if rupee were to be in the same range. We should be targeting somewhere close to a 64 or a 64.5.

Q: Now the crude, on MCX crude how-what kind of bullishness do you see and I would assume going long is still the strategy?

A: We have been bullish on crude even before the year began. The demand-supply factor is clearly in favour of prices rising higher and to add to it you have a supply crisis in oil producing countries. It's only headed one way and it's headed towards 110, which is going to be a near-term resistance and in MCX terms we are looking at somewhere close to Rs 4,800 to Rs 4,900 levels.