07/01/2019

FX MORNING UPDATE                                                                                     

USDINR opened at 69.96 on Friday and the pair traded in the 69.73-69.98 range. Spot USDINR closed at 69.73, loss of 45 ps for USD as against prior close of 70.18. RBI reference rate was fixed at 69.86. Jan USD/INR closed at 69.90, loss of 46 ps for USD as compared to prior day’s close of 70.36. Jan Euro/INR closed at 79.94, GBP/INR at 88.70 and Yen/INR at 64.84.

FII’S have sold Rs 1037 Cr of Indian Equities in Jan till date . FII’S have bought Rs 1114 Cr of Indian debt securities in Jan till date .

Benchmark Nifty climbed 0.52% on Friday. DOW climbed 746 points (3.29%) on Friday. Nikkei declined 2.26% and Hang seng climbed 1.63 % on Friday.

Euro closed the week at 1.1395, Pound at 1.2730,Yen at 108.53. 

Commodities: Gold is now at USD 1286 and WT1Crude at USD 48.30/Brent at USD 57.40.

Interest rates: USD 10 Yr yield is at 2.55% and 3 m libor closed at 2.90%. Indian 10 yr benchmark yield closed at 7.45%.   

Economic news: Global markets rebounded as Fed Chairman hinted at a more patient approach to rate hikes. He expressed concern over drop in US ISM (mfrg) and slow down in Chinese economy. He said that though jobs data is strong, inflation is modest to warrant a flexible approach.US employment data showed that US economy added 312k jobs vs expectation of 178k jobs. Unemployment rose to 3.9% and average hourly earnings grew 0.4% m/m. Strong US jobs data has allayed fears over US economic slow down.

Chinese Central bank lowered bank reserve requiremnt by 100 bps to support the development of real economy. US- China announced date for trade talks.              

Data highlights : -EU CPI missed expectation and grew at 1.4% y/y and PMI(services) was finalized at 51.2 and EU PPI declined -0.3% m/m.

-UK PMI(services) climbed to 51.2.

Monday’s calendar: – US ISM(non mfrg)

-EU Sentix investor confidence.

Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20,50 and 100 day moving averages but still above 200 day major moving average. 20 day moving average is at 70.58. 50 day moving average is at 71.51. 200 day moving average is at 69.35. Daily MACD is in sell zone, implying top at 72.45. Important support zone is at 69.50. Spot closed below its average level of the day.  

Intra day supports and resistances for Jan contract are:

PP: 70.02,S1:69.68, S2:69.47, R1:70.24, R2:70.57                                                             

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

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 200 day moving average. Next Major resistance is at 1.1500 and later at 1.1620. Major support is at 1.1265/1.12. Daily MACD is in buy zone, implying an important bottom at 1.1265. 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 buy zone, implying important bottom at 1.2480 and weekly MACD is  in sell zone, implying important top at 1.3298. Important resistance is at 1.28. Important support is at 1.2475 and later at 1.2360.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 114. Next important support is at 109.80. Important resistance is at  112.50.