FX MORNING UPDATE                                                                                   

USDINR opened at 82.06 y’day and the pair traded in the 81.96-82.09 range. Spot USDINR closed at 82, loss of 4ps for USD as against prior close of 82.04.

RBI reference rate was fixed at 82.02 on 10/05. May USD/INR closed at 82.09, loss of 5 ps for USD as compared to prior day’s close of 82.14. May Euro/INR closed at 89.97, GBP/INR at 103.48 and Yen/INR at 60.89. USDINR fwd premia was trading at around 2.20% p.a.  FX reserves climbed USD 4 bn as compared to prior week and stood at USD 588 bn as on Apr 28 th.

In May till date, FII’S  have bought Rs 4381 Cr of Equities and have sold Rs 2176 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 49 points (0.27%) y’day. DOW declined 30 points (0.09%) y’day. Nikkei declined 0.41% and Hang seng declined 0.53% y’day.

Euro is now at 1.0982, Pound at 1.2626, Yen at 134.18.

Commodities: Gold is now at USD 2038 and WT1Crude at USD 73/Brent at USD 77.

Interest rates: USD 10 Yr yield is at 3.42% and 3 m libor closed at 5.33%. Indian 10 yr benchmark yield closed at 7.04%.

Economic news: US CPI was in line with consensus, climbing 4.9% y/y. That was the smallest 12-month increase since April 2021. Core CPI (all items less food and energy) slowed from 5.6% yoy to 5.5% yoy, matched expectations.

ECB Chief said that there is more ground to cover to bring inflation back to 2%. She said that headline and Core inflation are critical inputs. She said that path of inflation is uncertain and upside risks to inflation persists.

Major currencies are stuck in narrow range. With important data events released, market awaits fresh developments to move either way.

Data highlights: – US CPI climbed 4.9% y/y, 0.4% m/m.

Thursday’s calendar : -US Weekly jobless claims and PPI

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 81.96. 50 day moving average is at 82.22.200 day moving average is at 81.49. Daily MACD is in buy zone. Important support is at 81.62/81.45 and important resistance is at 82.24/82.40. Spot closed below the average level of the day.

Intraday supports and resistances for May contract are:

PP: 82.09, S1:82.02, S2:81.95, R1:82.16, R2:82.23.             

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

However on directional basis, suggest the following:

USD Exports be hedged at 82.20+ 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 1.0940/1.0840. Daily MACD is in sell zone, implying an important top at 1.1075. 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 buy zone, implying important bottom at 1.2345 and weekly MACD is in buy zone, implying important bottom at 1.1803. Important support is at 1.2510/1.2345. Important resistance is at 1.2670.

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 133.50/132/130.60.

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