FX MORNING UPDATE                    

USDINR opened at 74.72 on Friday and the pair traded in the 74.67-74.78 range. Spot USDINR closed at 74.69, loss of 17 ps for USD as against prior close of 74.86. RBI reference rate was fixed at 74.72 on 04/02Feb USD/INR closed at 74.85, loss of 21 ps for USD as compared to prior day’s close of 75.06. Feb Euro/INR closed at 85.82, GBP/INR at 101.53 and Yen/INR at 65.22. USDINR fwd premia was trading at around 4.45% p.a.  

USDINR 74.72
EURINR 85.61
GBPINR 101.55
JPYINR 64.99

In Feb, FII’S have net sold Rs 1589 cr in Equity segment and have net sold Rs 692 cr of debt. In this financial year, FII’S have net sold Rs 34311 Cr worth of Indian Equities and have bought Rs 5816 Cr worth of Indian debt. In 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs  42820 Cr in debt.

Benchmark Nifty declined 43 points (-0.25%). DOW declined 21 points (-0.06%). Nikkei climbed 0.73% and Hang Seng climbed 3.24% on Friday.

Euro closed at 1.1446, Pound at 1.3529, Yen at 115.20.

Commodities: Gold is now at USD 1808 and WT1Crude at USD 92/Brent at USD 92.80.

Interest rates: USD 10 Yr yield is at 1.91% and 3 m libor closed at 0.27%. Indian 10 yr benchmark yield closed at 6.87%.

Economic news: US non-farm payroll employment grew 467k in January, well above expectation of 150k. Prior month’s figure was also revised sharply up from 199k to 510k. Employment was still down -2.9m or -1.9% from its pre-pandemic level in February 2020.

Unemployment rate, however, ticked up from 3.9% to 4.0%, versus expectation of 3.9%. Participation rate rose from 61.9% to 62.2%. Average hourly earnings posted strong growth of 0.7% mom, above expectation of 0.5% mom.

USD staged a comeback against all except Euro, which was a winner this week on ECB’S shift in inflation view.

Data highlights: –EU retail sales declined -3% m/m.

-UK PMI(construction) climbed to 56.3.

Monday’s calendar: -EU sentix investor confidence survey

USD/INR      74.78 74.67
EUR/USD      1.1446 1.1485 1.1411
GBP/USD      1.3529 1.3616 1.3504
USD/JPY      115.20 115.44 114.77

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1447 1.1483 1.1520    1.1409 1.1373  
GBP/USD 1.3550 1.3595  1.3662   1.3484 1.3438  
USD/JPY 115.13 115.50  115.80   114.82 114.46  
USD/INR 74.71 74.75 74.82   74.64 74.60  


Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1365/1.1285/1.1120 1.1480 DN UP>1.17
GBP/USD 1.3435/1.3355/1.3170 1.3670/1.3750 DN UP>1.3750
USD/JPY 113.50 116.30 UP DN<113.50
USD/INR 74.70/74.40 75.05 SIDE UP>75.05
USD/CHF 0.9085 0.9275/0.9375 SIDE DN<0.9085

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 74.48. 50 day moving average is at 74.91.200 day moving average is at 74.30. Daily MACD is in buy zone, implying bottom at 73.80. Important resistance is at 75.05/75.35 and important support is at 74.40. Spot closed below its average level of the day.

Intraday supports and resistances for Feb contract are:

PP: 74.87, S1:74.80, S2:74.75, R1:74.92, R2:74.99.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR exports can be hedged at 75.05 +.


EURO/USD: The pair is below 200 day major moving average, but above 20 and 50 day moving average,. Major resistance is at 1.1485. Next major support is at 1. 1.1365/1.1285.. Daily MACD is in buy zone, implying an important bottom at 1.1120. Weekly MACD is in buy zone, implying important bottom at 1.1120.

GBP/USD: The pair is above 50 ,but below 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.3670 and weekly MACD is in buy zone, implying important bottom at 1.3170. Important support is at 1.3170. Important resistance is at 1.3670/1.3750.

USD/YEN: The pair is above all major moving averages. Daily MACD is in buy zone, implying important bottom at 113.50. Next important resistance is at 116.35. Important support is at 113.50

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