USDINR opened at 81.39 y’day and the pair traded in the 81.22-81.42 range. Spot USDINR closed at 81.36, gain of 12 ps for USD as against prior close of 81.24.

RBI reference rate was fixed at 81.35 on 19/01. Jan USD/INR closed at 81.45, gain of 13 ps for USD as compared to prior day’s close of 81.32. Jan Euro/INR closed at 88.18, GBP/INR at 100.46 and Yen/INR at 63.43. USDINR fwd premia was trading at around 2.24% p.a.  FX reserves stands at USD 562 bn as on Jan 6 th.  

In Jan, FII’S have sold Rs 2312 Cr of Equities till date and have sold Rs 1348 Cr of debt till date. In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty declined 57 points (0.32%) y’day. DOW declined 252 points (0.76%) y’day. Nikkei declined 1.44%  and Hang Seng declined 0.12% y’day.

Euro is now at 1.0829, Pound at 1.2379, Yen at 128.66.

Commodities: Gold is now at USD 1931 and WT1Crude at USD 81/Brent at USD 86.50.

Interest rates: USD 10 Yr yield is at 3.40% and 3 m libor closed at 4.81%. Indian 10 yr benchmark yield closed at 7.31%.

Economic news: In the minutes of ECB’s December meeting, it’s noted that a “large number” of members “initially” expressed preference for a 75bps hike and to communicate that interest rates would “still have to rise significantly at a steady pace to reach levels that were sufficiently restrictive”. Meanwhile, 50bps hikes was “judged to constitute an appropriate pace”.

ECB President Christine Lagarde said in Davos that, “Inflation by all accounts, whichever way you look at it, is way too high.”“There is determination at the ECB to bring (inflation) back in a timely manner and we should stay the course until we have been in restrictive territory for long enough to bring it down,” Lagarde added.

Data highlights: – US Weekly jobless claims declined to 190k, building permits and housing starts were reported at 1.33 mn and 1.38 mn respectively.

Friday’s calendar : – US existing home sales

-UK retail sales.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20 ,50,100 day averages, but still above 200 day major moving averages.20 day moving average is at 82.25. 50 day moving average is at 82.10.200 day moving average is at 79.85. Daily MACD is in sell zone. Important support is at 81.05/80.90 and important resistance is at 81.93. Spot closed above its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 81.38, S1:81.29, S2:81.14, R1:81.5, R2:81.62.             

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 82.10+.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day major moving averages. Major resistance is at 1.0735/1.08/1.0945. Next major support is at 1.0480/1.0420. Daily MACD is in sell zone, implying an important top at 1.0740. Weekly MACD is in buy zone, implying important bottom at 0.9535.

GBP/USD: The pair is above 50 and 200 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 1.1840. Important resistance is at 1.2450/1.2750.

USD/YEN: The pair is below 20, 50 and 100 day moving averages. Daily MACD is in sell zone, implying important top at 134.50. Important support is at 129.50/126.50. Major resistance is at 134.50/138.50.

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