FX MORNING UPDATE 

26/10/2018

                                                                                      

USDINR opened at 73.34 y’day and the pair traded in the 73.18-73.37 range. Spot USDINR closed at 73.27, gain of 12 ps ps for USD as against prior close of 73.15. Rupee is on recovery mode as Oil declined further. WT I Crude has declined 10 USD from its recent peak of USD 76 to USD 66.RBI reference rate was fixed at 73.26.Oct USD/INR closed at 73.27, gain of 13 ps for USD as compared to prior day’s close of 73.14. Oct Euro/INR closed at 83.62, GBP/INR at 94.51 and Yen/INR at 65.23.

FII’S have sold Rs 18111 Cr of Indian Equities in Oct till date . FII’S have sold Rs 11497 Cr of Indian debt securities in Oct till date . On a cumulative basis, FII’S have sold Rupees 27734 Cr of Indian Equities till date for this calendar year and have sold  Rupees 60798 Cr of Indian debt in this calendar year till date.

Benchmark Nifty declined 0.98% y’day. DOW declined 608 points (2.41%) y’day. Nikkei declined 3.72% and Hang seng declined 1.01% y’day.

Euro is now at 1.1371, Pound at 1.2821,Yen at 112.31.    

Commodities: Gold is now at USD 1234 and WT1Crude at USD 66.78.

Interest rates: USD 10 Yr yield is at 3.12% and 3 m libor closed at 2.39%. Indian 10 yr benchmark yield closed at 7.87%.        

Economic news: Euro did not show much reaction to ECB’S steady policy. ECB left main refinancing rate unchanged at 0.00% as widely expected. Marginal lending rate and deposit rate were held at 0.25% and -0.40% respectively. It also reiterated that interest rates will “remain at their present levels at least through the summer of 2019”. ECB also sticks with the plan to end the EUR 15B per month asset purchase after December.

On risks to growth, ECB Chief opined that it can still be assessed as “broadly balanced”. Main prominent downside risks include trade protectionism, emerging markets and financial market volatility. He was confident that inflation would move towards its target rate, even though it is muted now.

Data Highlights: US Weekly jobless claims was at 215k, pending home sales climbed 0.5% in Sept and durable orders climbed 0.8% m/m.

-German Ifo survey declined to 102.8.       

Friday’s calendar:- US GDP(advance estimate).     

USD/INR   73.37 73.18
EUR/USD 1.1371 1.1433 1.1356
GBP/USD 1.2821 1.2919 1.2798
USD/JPY 112.31 112.67 111.82

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1524 1.1615 1.1714 1.1805 1.1425 1.1334 1.1235
GBP/USD 1.3106 1.3201 1.3331 1.3426 1.2976 1.2881 1.2751
USD/JPY 112.30

 

112.98 113.41 114.09

 

111.87 111.19 110.76

 

USD/INR 73.27 73.36 73.46   73.17 73.08  

 

                                                                                                                                               

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1430/1.13 1.1630/1.1830 DOWN SIDE>1.1630
GBP/USD 1.2925/1.2785 1.33 SIDE DN<1.2785
USD/JPY 111.65/110.50 113.15/114.70 UP SIDE<111.65
USD/INR 72.95 74.50 UP SIDE<72.90
USD/CHF 0.9770/0.9450 1.0070 UP  DN <0.9770

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving         is at 73.46. 50 day moving average is at 72. 200 day moving average is at 67.30. Daily MACD is in sell zone, implying top at 74.47 . Important support zone is at 72.90. Spot closed at its average level of the day.  

Intra day supports and resistances for Oct contract are:

PP: 73.30,S1:73.15, S2:73.03, R1:73.42, R2:73.57.                                                              

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 1.1620/1.1820 and later at 1.1960. Major support is at 1.1430 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 buy zone, implying important bottom at 1.2925 and weekly MACD is  in buy zone, implying important bottom at 1.2665. The pair is trading below 200 day moving average. Important resistance is at 1.33 and later at 1.35. Important support is at 1.2925 and later at 1.2785.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 114.56. Next important support is at 111.60/110.55. Important resistance is at  113.15 and later at 114.60.

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