USDINR opened at 81.66 Y’day and the pair traded in the 81.65-81.82 range. Spot USDINR closed at 81.80, gain of 5 ps for USD as against prior close of 81.75.

RBI reference rate was fixed at 81.73 on 04/05. May USD/INR closed at 81.88, loss of 7 ps for USD as compared to prior day’s close of 81.88. May Euro/INR closed at 90.43, GBP/INR at 102.42 and Yen/INR at 60.66. USDINR fwd premia was trading at around 2.20% p.a.  FX reserves declined USD 2 bn as compared to prior week and stood at USD 584 bn as on Apr 21 st.

In April, FII’S  have bought Rs 9264 Cr of Equities and have bought Rs 758 Cr of debt . In 2022-23 fiscal year, FII’S have net sold Rs 27593 Cr of Equities and have net bought Rs 838 Cr of debt.

Benchmark Nifty climbed 165 points (0.92%) y’day. DOW declined 286 points (0.86%) y’day. Nikkei climbed 0.12% and Hang seng climbed 1.27% y’day.

Euro is now at 1.1029, Pound at 1.2584, Yen at 134.14.

Commodities: Gold is now at USD 2055 and WT1Crude at USD 69/Brent at USD 73.

Interest rates: USD 10 Yr yield is at 3.38% and 3 m libor closed at 5.22%. Indian 10 yr benchmark yield closed at 7.03%.

Economic news: ECB hiked rates by 25 bps, less than expected. ECB Chief added that they are not pausing rate hikes. ECB noted that “underlying price pressures remain strong.”The central bank acknowledged that the transmission of past rate increases to euro area financing and monetary conditions has been forceful, but added that “the lags and strength of transmission to the real economy remain uncertain.”

ECB emphasized its commitment to ensuring that policy rates are “sufficiently restrictive” to achieve a timely return of inflation to the 2% medium-term target, stating that rates will be kept at these levels “for as long as necessary”.

EU and UK PMI(services) continued to remain strong.

Focus shifts to US employment data.

Data highlights: – US Weekly jobless claims climbed to 242k.

-EU PMI(services) was finalized at 56.2, PPI declined -1.6% m/m.

-UK PMI(services) was finalized at 55.9.

Friday’s calendar : – US non farm payrolls

-German factory orders and retail sales

-UK PMI(construction)

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 average.20 day moving average is at 81.97. 50 day moving average is at 82.27.200 day moving average is at 81.49. Daily MACD is in sell zone. Important support is at 81.62/81.45 and important resistance is at 82/82.24. Spot closed above the average level of the day.

Intraday supports and resistances for May contract are:

PP: 81.89, S1:81.83, S2:81.78, R1:81.94, R2:82.             

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

However on directional basis, suggest the following:

USD Exports be hedged at 82+ levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50, 100 and 200 day major moving averages. Major resistance is at 1.1075. Next major support is at 1.09/1.0750. Daily MACD is in buy zone, implying an important bottom at 1.0515. Weekly MACD is in buy zone, implying important bottom at 1.0515.

GBP/USD: The pair is above 50,100 and 200 day moving averages . Daily MACD is in sell zone, implying important top at 1.2545 and weekly MACD is in buy zone, implying important bottom at 1.1803. Important support is at 1.2345/1.2175. Important resistance is at 1.2545.

USD/YEN: The pair is below   200 day moving average. Daily MACD is in buy zone, implying important bottom at 129.65. Important resistance is at 135/138 and support is at 132.75/132/130.60.

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