FX MORNING UPDATE 

                                                                                      

USDINR opened lower at 70.08 Y’day and the pair traded in the 69.86-70.47 range. Spot USDINR closed at 70.40, loss of 5 ps for USD as against prior close of 70.45. RBI reference rate was fixed at 70.11. Dec USD/INR closed at 70.45, loss of 5 ps for USD as compared to prior day’s close of 70.50. Dec Euro/INR closed at 80.43, GBP/INR at 89.15 and Yen/INR at 62.79. Rupee gained crude decline. However, RBI stemmed Rupee gain through buying of USD by PSU banks.

FII’S have bought Rs 2358 Cr of Indian Equities in Dec . FII’S have bought Rs 1512 Cr of Indian debt securities in Dec till date . On a cumulative basis, FII’S have sold Rupees 24323 Cr of Indian Equities till date for this calendar year and have sold  Rupees 55544 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.54% y’day. DOW declined 351 points (1.49%) Y’day. Nikkei declined 0.60% and Hang seng climbed 0.20% y’day.

Euro is now at 1.1380, Pound at 1.2618,Yen at 112.43.    

Commodities: Gold is now at USD 1247 and WT1Crude at USD 47.34 /Brent at USD 56.50.

Interest rates: USD 10 Yr yield is at 2.78% and 3 m libor closed at 2.90%. Indian 10 yr benchmark yield closed at 7.22%.        

Economic news: Fed increased the target range for its benchmark interest rate by 25 basis points to a new band of 2.25%-2.5%, putting the Fed funds rate at its highest level since the spring of 2008. All ten voting members of the FOMC voted in favor of Wednesday’s decision. Fed pointed to a labor market that has “continued to strengthen” and economic activity that is “rising at a strong rate.” The Fed did note the slowdown in private investment seen over the last several months, saying “business fixed investment has moderated from its rapid pace earlier in the year.”                                                                                 

FOMC projections show that Fed may hike rates only twice next year, as neutral rate is close to 2.8%. The overall impression is that Fed is nearing end of rate hike cycle.

Data highlights : – US existing home sales climbed to 5.32 m.

-UK CPI climbed 2.3% y/y, RPI climbed 3.2% y/y and PPI(output) climbed 0.2% m/m.

Thursday’s calendar: –  US weekly jobless claims and Phily Fed mfrg index

-UK retail sales.

USD/INR   70.47 69.86
EUR/USD 1.1380 1.1439 1.1365
GBP/USD 1.2618 1.2679 1.2608
USD/JPY 112.43 112.66 112.09

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1397 1.1429 1.1471 1.1503 1.1355 1.1323 1.1281
GBP/USD 1.2638 1.2668 1.2709 1.2739 1.2597 1.2567 1.2526
USD/JPY 112.39

 

112.69 112.96 113.26

 

112.12 111.82 111.55

 

USD/INR 70.24 70.62 70.85   70.01 69.63

 

 

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1270/1.1215 1.1500/1.1620 DOWN SIDE>1.15
GBP/USD 1.2475/1.2360 1.27/1.29 DOWN SIDE>1.29
USD/JPY 112.30/111.30 114.20/114.60 UP SIDE<112.20
USD/INR 71.15/69.50 72.45 UP SIDE < 71.10
USD/CHF 0.9845 1.0130 UP  DN <0.9845

Technicals: Spot closed below 20,50 and 100 day movong averages but still above 20 day major moving average. 20 day moving average is at 70.91. 50 day moving average is at 72.32. 200 day moving average is at 68.78. Daily MACD is in buy zone, implying bottom at 69.50 . Important support zone is at 69.50. Spot closed above its average level of the day.  

Intra day supports and resistances for DEC contract are:

PP: 70.30,S1:70.05, S2:69.66, R1:70.69, R2:70.94.                                                              

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 1.1500 and later at 1.1620. Major support is at 1.12. Daily MACD is in sell zone, implying an important top at 1.1470. Weekly MACD is in sell zone, implying important top at 1.1805.

GBP/USD: The pair is below 200 day moving average.Trend is bearish in daily chart. Daily MACD  is in sell zone, implying important top at 1.3175 and weekly MACD is  in sell zone, implying important top at 1.3298. Important resistance is at 1.27 and later at 1.29. Important support is at 1.2475 and later at 1.2360.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 112.20. Next important support is at 112.20/111.35. Important resistance is at  114.20/114.60/

 

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