FX MORNING UPDATE

USDINR opened at 82.74 y’day and the pair traded in the 82.66-82.82 range. Spot USDINR closed at 82.81, gain of 6 ps for USD as against prior close of 82.75.

RBI reference rate was fixed at 82.77 on 21/12. Dec USD/INR closed at 82.82, gain of 3 ps for USD as compared to prior day’s close of 82.79. Dec Euro/INR closed at 87.93, GBP/INR at 100.21 and Yen/INR at 62.85. 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 5th straight week from USD 527 bn.

PAIRSRBI REF RATE (21/12)
USDINR82.77
EURINR87.84
GBPINR100.67
JPYINR62.65

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 186 points (1.01%) y’day. DOW climbed 526 points (1.60%). Nikkei declined 0.68% and Hang Seng climbed 0.34% y’day.

Euro is now at 1.0632, Pound at 1.2121, Yen at 131.78.

Commodities: Gold is now at USD 1827 and WT1Crude at USD 78.60/Brent at USD 82.40.

Interest rates: USD 10 Yr yield is at 3.65% and 3 m libor closed at 4.77%. Indian 10 yr benchmark yield closed at 7.31%.

Economic news: Global markets are under stress due to rising Covid infections in China, Korea and US. Indian Govt has put states on alert.

RBI’S Dec meeting minutes was confident about economy, though inflation would persist and requires calibrated approach. Agri output is likely to be better and Credit growth is robust. Government’s thrust on capital spending and infrastructure should bolster investment activity. According to the RBI’s survey, consumer confidence is improving. The economy, however, faces accentuated headwinds from protracted geopolitical tensions, tightening global financial conditions and slowing external demand. GDP growth is expected to be 6.8%.

Data highlights: – – US existing home sales dipped to 4.09 mn and consumer confidence climbed to 108.3.

Thursday’s calendar : US Weekly jobless claims

-UK GDP

USD/INR   82.8282.66
EUR/USD       1.06321.06471.0589
GBP/USD       1.21211.21941.2054
USD/JPY       131.78132.54131.49

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.06131.06371.06711.06951.05791.05551.0521
GBP/USD1.21101.21661.22501.23061.20261.19701.1886
USD/JPY132.17132.85133.22133.90131.80131.12130.74
USD/INR82.7682.8682.92 82.7082.60 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.0470/1.03201.0740UPSIDE<1.0440
GBP/USD1.2105/1.19/1.16501.2350/1.2750UPSIDE<1.19
USD/JPY133.50/130.50137.70/140.50/142.50DNSIDE>137.70
USD/INR82.58/82.3782.90/83.30UPSIDE<82.58
USD/CHF0.910.9375/09.9645DNSIDE>0.9375

Technicals: Spot closed above 50, 200 day major moving averages.20 day moving average is at 82.16. 50 day moving average is at 82.16.200 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: 82.78, S1:82.71, S2:82.62, R1:82.87, R2:82.94.             

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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