USDINR opened at 82.50 on Friday and the pair traded in the 82.43-82.58 range. Spot USDINR closed at 82.55, loss of 18 ps for USD as against prior close of 82.73.

RBI reference rate was fixed at 82.46 on 17/03. Mar USD/INR closed at 82.63, loss of 22 ps for USD as compared to prior day’s close of 82.85. Mar Euro/INR closed at 87.82, GBP/INR at 100.28 and Yen/INR at 62.38. USDINR fwd premia was trading at around 2.30% p.a.  FX reserves declined by USD 2.39 bn to USD 560 bn as on March 10 th.

In March, FII’S  have bought Rs 16137 Cr of Equities and have sold Rs 2531 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 114 points (0.67%) on Friday. DOW declined 384 points (1.19%) on Friday. Nikkei climbed 1.2% and Hang Seng  climbed 1.64% on Friday.

Euro is now at 1.0668, Pound at 1.2182, Yen at 131.80.

Commodities: Gold is now at USD 1993 and WT1Crude at USD 66/Brent at USD 72.50.

Interest rates: USD 10 Yr yield is at 3.43% and 3 m libor closed at 4.99%. Indian 10 yr benchmark yield closed at 7.35%.

Economic news: Banking crisis dominated last week developments. SVB filed for bankruptcy. First republic bank got deposits from big players and Credit Suisse obtained USD 53 bn liquidity from Swiss national bank. However, there is apprehension whether these short term measures will be sufficient. In FX market, Yen emerged as the clear winner due to risk aversion and a boost from falling benchmark treasury yields in US and Europe. US 10 Year yield declined to 3.43%, 2-year yield declined to 3.82% and even 3 m Libor declined from 5.13% to 4.99%. German 10 Year yield declined to 2.11%.

In asset markets, Gold climbed 5.5%, Crude Oil declined, European indices fell and Nasdaq witnessed a robust rebound.

FOMC and BOE meetings are significant events for the week. Both banks could still hike rates by 25 bps.

Data highlights: – US industrial production was flat m/m.

-EU CPI climbed 8.5% y/y.

Monday’s calendar : – No major data release.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 20, 50 and 100 day major moving averages.20 day moving average is at 82.49. 50 day moving average is at 82.20.200 day moving average is at 81. Daily MACD is in buy zone. Important support is at 82.43/82.30/82.16 and important resistance is at 82.82/82.95. Spot closed above the average level of the day.

Intraday supports and resistances for March contract are:

PP: 82.58, S1:82.50, S2:82.39, R1:82.70, R2:82.77.             

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

However on directional basis, suggest the following:

USD Exports be hedged between 82.70-82.85 levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 100 and 200 day major moving averages, but below 50 moving average. Major resistance is at 1.0750. Next major support is at 1.0515. Daily MACD is in buy zone, implying an important bottom at 1.0515. Weekly MACD is in sell zone, implying important top at 1.1035.

GBP/USD: The pair is above 50,100 and 200 day moving averages . Daily MACD is in buy zone, implying important bottom at 1.1803 and weekly MACD is in sell zone, implying important top at 1.2450. Important support is at 1.1920/1.1803. Important resistance is at 1.2205/1.2450.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 137.90. Important resistance is at 137.90 and support is at 129.80/127.20.

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