FX MORNING UPDATE                                                                                   

USDINR opened at 82.73 on Friday and the pair traded in the 82.64-82.79 range. Spot USDINR closed at 82.67, gain of 8 ps for USD as against prior close of 82.59.

RBI reference rate was fixed at 82.70 on 19/05. May USD/INR closed at 82.76, gain of 16 ps for USD as compared to prior day’s close of 82.60. May Euro/INR closed at 89.39, GBP/INR at 102.89 and Yen/INR at 59.91. 1 year USDINR fwd premia was trading at around 1.90% p.a.  FX reserves climbed USD 3 bn last week as compared to prior week and stood at USD 599.5 bn as on May 12 th. This is the highest since June 2022.

In May till date, FII’S  have bought Rs 24476 Cr of Equities and have bought Rs 1340 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 73 points (0.41%) on Friday. DOW declined 109 points (0.33%) on Friday. Nikkei climbed 0.77% and Hang seng declined 1.40% on Friday..

Euro is now at 1.0807, Pound at 1.2446, Yen at 137.92.

Commodities: Gold is now at USD 1979 and WT1Crude at USD 71.50/Brent at USD 75.50.

Interest rates: USD 10 Yr yield is at 3.69% and 3 m libor closed at 5.33%. Indian 10 yr benchmark yield closed at 7%.

Economic news: Fed Chairman said time has come to make measured assessment of the monetary tightening as is has lagged effect. He added that tighter financial conditions due to banking stress will give space for Fed to wait and assess the situation. He summed it up saying “As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals. Of course, the extent of that is highly uncertain,”

USDINR pair retraced from 82.7975 to close at 82.67. Rceovery in Crosses and Yuan along with RBI’S intervention may have helped Rupee to stabilize. Rupee has declined more than 1 Rupee in two weeks.

Data highlights: – No major data release.

Monday’s calendar : – No major data release.

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above all major major moving averages.20 day moving average is at 82.06. 50 day moving average is at 82.17.200 day moving average is at 81.49. Daily MACD is in buy zone. Important support is at 82.48/82.35 and important resistance is at 82.70/82.80. Spot closed below the average level of the day.

Intraday supports and resistances for May contract are:

PP: 82.74, S1:82.66, S2:82.56, R1:82.84, R2:82.92.             

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

However on directional basis, suggest the following:

USD Exports be hedged.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 20, 50 but above 200 day major moving average. Major resistance is at 1.1075. Next major support is at 1.0750. Daily MACD is in sell zone, implying an important top at 1.1075. Weekly MACD is in sell zone, implying important top at 1.1095.

GBP/USD: The pair is above 50,100 and 200 day moving averages . Daily MACD is in sell zone, implying important top at 1.2679 and weekly MACD is in buy zone, implying important bottom at 1.1803. Important support is at 1.2390/1.2250. Important resistance is at 1.2675.

USD/YEN: The pair is above all major averages. Daily MACD is in buy zone, implying important bottom at 133.50. Important resistance is at 142.25 and support is at 135.35/133.50.

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