03/10/2018

USDINR opened at 72.66 on Monday and the pair traded in the 72.60-72.93 range. Spot USDINR closed at 72.91, gain of 43 ps ps for USD as against prior close of 72.48.RBI reference rate was fixed at 72.80.Oct USD/INR closed at 73.15, gain of 41 ps for USD as compared to prior day’s close of 72.74. Oct Euro/INR closed at 85.07, GBP/INR at 95.53 and Yen/INR at 64.29.

FII’S sold Rs 7924 Cr of Indian Equities in Sept . FII’S  sold Rs 9858 Cr of Indian debt securities in Sept . On a cumulative basis, FII’S have sold Rupees 7923 Cr of Indian Equities till date for this calendar year and have sold  Rupees 48631 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.71% on Monday. DOW climbed 18 points (0.07%) on Friday. Nikkei climbed 0.10% and Hang seng declined 2.38% on Monday.

Euro is now at 1.1582, Pound at 1.2995,Yen at 113.79.    

Commodities: Gold is now at USD 1211 and WT1Crude at USD 75.22.

Interest rates: USD 10 Yr yield is at 3.06% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 8.02%.        

Economic news: USD/CNH (offshore Yuan) surges again and takes out 6.8959 resistance. This is an important sign of underlying weakness in the Yuan. Hang Seng declined 2.4% y’day and implies deep sell off in EM markets and Currencies. US and Canada reached trade agreement called USCMA , which will replace the old NAFTA. A new chapter has been added that would require these 3 countries (US, Canada and Mexico) to report on Balance of payments positions and on FX reserves and central bank intervention in spot and fwd markets. This is a new precedent, probably aimed at China.

Crude prices climbed steeply as markets prepare for supply tightness as US sanctions on Iran Oil nears deadline date of Nov 4 th. Euro declined as EU-ITALY clash escalated over Italian budet deficit target.

Data Highlights: – US ISM(mfrg) dipped marginally to 59.8, construction spending climbed 0.1% m/m.

-EU PMI(mfrg) was finalized at 53.2, unemployment rate was reported at 8.1% and PPI climbed 0.3% m/m.

-UK PMI(mfrg)            climbed to 53.8 and PMI(construction) declined to 52.1.

Wednesday’s calendar:- US ISM(non mfrg) and ADP employment report

-EU PMI(services) and retail sales

-UK PMI(services)

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving         is at 72.21. 50 day moving average is at 70.42. 200 day moving average is at 66.89. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 72.40/71.50. Important resistance is at 72.95 and later at 73.45. Spot closed above its average level of the day.  

Intra day supports and resistances for Oct contract are:

PP: 73.06,S1:72.91, S2:72.68, R1:73.29, R2:73.44.                                                               

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Next Major resistance is at 1.1820 and later at 1.1960. Major support is at 1.1525 and later at 1.13. Daily MACD is in sell zone, implying an important top at 1.1820. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is sideways in daily chart. Daily MACD  is in sell zone, implying important top at 1.33 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below 200 day moving average. Important resistance is at 1.33 and later at 1.3560. Important support is at 1.3010/1.2960 and later at 1.2785.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.70. Next important support is at 111.85/109.70. Important resistance is at  114.70.