USDINR opened at 82.65 y’day and the pair traded in the 82.65-82.89 range. Spot USDINR closed at 82.75, gain of 5 ps for USD as against prior close of 82.70.

RBI reference rate was fixed at 82.79 on 20/12. Dec USD/INR closed at 82.79, gain of 8ps for USD as compared to prior day’s close of 82.71. Dec Euro/INR closed at 88.01, GBP/INR at 100.70 and Yen/INR at 62.54. USDINR fwd premia was trading at around 2.05% p.a.  FX reserves stands at USD 564 bn as on Dec 9 th.  FX reserves have risen for the 5^th straight week from USD 527 bn.

In Dec, FII’S have bought Rs 1642 Cr of Equities till date and have sold Rs 2508 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.15 lac Cr worth of Equities.

Benchmark Nifty declined 35 points (0.19%) y’day. DOW climbed 92 points (0.28%). Nikkei declined 2.46% and Hang Seng declined 1.33% y’day.

Euro closed the week 1.0623, Pound at 1.2185, Yen at 131.75.

Commodities: Gold is now at USD 1828 and WT1Crude at USD 76/Brent at USD 80.

Interest rates: USD 10 Yr yield is at 3.71% and 3 m libor closed at 4.77%. Indian 10 yr benchmark yield closed at 7.29%.

Economic news: BoJ surprised markets by widening the band of 10-year JGB yield from 0.25% to 0.50% today. At the same time, short term policy rate is kept unchanged at -0.10% as expected. Under the yield curve control framework, the central bank will still continue to purchases JGBs without an upper limit to keep 10-year yield at around 0%. But now, the bank will offer to purchase 10-year JGB yields at 0.50% every business day through fixed-rate operations, effectively allowing 10-year yield to rise towards 0.50% level.

JPY gained on the above development. USDJPY is trading at around 131.75 as against 137.45 y’day.

Data highlights: – US building permits declined to 1.34 mn and housing starts climbed to 1.43 mn.

-EU Consumer confidence was reported at -22.

Wednesday’s calendar : – US existing home sales and consumer confidence.

Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50, 200 day major moving averages.20 day moving average is at 82.15. 50 day moving average is at 82.15.200 day moving average is at 79.10. Daily MACD is in buy zone. Important support is at 82.58/82.37 and important resistance is at 82.92. Spot closed above its average level of the day.

Intraday supports and resistances for Dec contract are:

PP: 82.79, S1:82.66, S2:82.53, R1:82.92, R2:83.05.             

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

However on directional basis, suggest the following:

Exports be hedged on rally to 82.90+.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 20 day major moving averages. Major resistance is at 1.0735. Next major support is at 1.0440/1.0290. Daily MACD is in sell zone, implying an important top at 1.0735. Weekly MACD is in buy zone, implying important bottom at 0.9535.

GBP/USD: The pair is above 50 and 20 day moving averages. Daily MACD is in sell zone, implying important top at 1.2445 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.2105/1.19. Important resistance is at 1.2350/1.2750.

USD/YEN: The pair is below 20, 50 and 100 day moving averages. Daily MACD is in buy zone, implying important bottom at 133.60. Important support is at 133.60/130.50. Major resistance is at 137.70/140.50/142.25.

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