13/08/2018

USDINR opened at 68.82 on Friday and the pair traded in the 68.76-69.01 range. Spot USDINR closed at 68.82, gain of 14 ps for USD as against prior close of 68.68.RBI reference rate was fixed at 68.62. Aug USD/INR closed at 68.97, gain of 16 ps for USD as compared to prior day’s close of 68.81. Aug Euro/INR closed at 79.14, GBP/INR at 88.16 and Yen/INR at 62.20.

FII’S have bought Rs 1469 Cr of Indian Equities in Aug till date . FII’S have bought Rs 5500 Cr of Indian debt securities in Aug till date . On a cumulative basis, FII’S have bought Rupees 3498 Cr of Indian Equities till date for this calendar year and have sold  Rupees 35639 Cr of Indian debt in this calendar year till date.

Benchmark Nifty declined 0.39% on Friday. DOW declined 196 points (0.77%) on Friday. Nikkei declined 1.33% and Hang seng declined 0.84% on Friday.

Euro closed the week at 1.1411, Pound at 1.2771,Yen at 110.81.

Commodities: Gold is now at USD 1219 and WT1Crude at USD 67.78

Interest rates: USD 10 Yr yield is at 2.86% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.75%.        

Economic news: IIP climbed 7% in June as against 3.9% in May.IIP has clocked 5.2% growth in Q 1 against 1.9%, a year earlier.Mfrg climbed 6.9% in June. Mining expanded 6.6%. Capital good rose 9.6% and consumer durables climbed 13.1%. Focus is on CPI data. Indian Q1 GDP is to be released on Aug 31 st. Expect 7.5% upwards for Q1.

Fear of contagion due to free fall in Turkish lira and exposure of EU banking system to Turkey rattled Global markets. US announced doubling of metals tariffs on Turkish imports even as it fired fresh sanction salvo on Russia. Euro’s decline is attributed to Turkish problems.

According to Bank for International Settlements data, Spanish banks are are owed USD 83.3B by Turkish borrowers; French lenders are owed USD 38.4B; and banks in Italy are owed USD 17B. 

Japanese GDP grew 0.5% qoq, 1.9% annualized in Q2. That’s way stronger than expectation of 0.3% qoq, 1.4% annualized. It’s also a strong rebound from prior quarter’s -0.2% qoq, -0.6% annualized contraction.

UK GDP grew 0.4% qoq in Q2, doubled that of Q1’s 0.2% qoq and met expectations. Year-over-year, GDP grew 1.3% yoy in Q2, also matched expectation. 

Data Highlights : – US CPI climbed 0.2% m/m.

-UK GDP climbed 0.4% q/q, industrial and manufacturing production climbed 0.4% m/m respectively.       

Monday’s calendar: – No major data release.                    

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 68.70. 50 day moving average is at 68.35. 200 day moving average is at 65.90. Daily MACD is in sell zone, implying top at 69.10 . Important support zone is at 68.30 and later at 67.70. Important resistance is at 69.10. Spot closed below its average level of the day.  

Intra day supports and resistances for Aug contract are:

PP: 69.01,S1:68.85, S2:68.73, R1:69.13, R2:69.29.                                                              

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day major moving averages. Next Major resistance is at 1.1510 and later at 1.1620. Major support is at 1.13. Daily MACD is in sell zone, implying an important top at 1.1850. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in sell zone, implying important top at 1.3215 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.2957 and later at 1.3050. Important support is at 1.26.           

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 113. Next important support is at 110.20 and later at 109.20. Important resistance is  113.