FX – MORNING UPDATE :
USDINR opened at 81.89 y’day and the pair traded in the 81.87-82.03 range. Spot USDINR closed at 81.99, gain of 13 ps for USD as against prior close of 81.86.
RBI reference rate was fixed at 81.98 on 26/07. July USD/INR closed at 82.03, gain of 14 ps for USD as compared to prior day’s close of 81.89. July Euro/INR closed at 90.48, GBP/INR at 105.01 and Yen/INR at 57.90. 1 year USDINR fwd premia was trading at around 1.68% p.a. FX reserves climbed USD 12 bn last week as compared to prior week and stood at USD 609 bn as on July 14 th.
| PAIRS | RBI REF RATE (26/07) |
| USDINR | 81.98 |
| EURINR | 90.71 |
| GBPINR | 105.74 |
| JPYINR | 58.29 |
In July ,FPI’S have bought Rs 43804 Cr of Equities and bought Rs 705 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 97 points (0.50%) y’day. US S&P closed flat (0%) . Nikkei climbed 0.01% and Hang seng declined 0.35% y’day
Euro is now at 1.1077, Pound at 1.2829, Yen at 141.37.
Commodities: Gold is now at USD 1963 and WT1Crude at USD 79/Brent at USD 83.
Interest rates: USD 10 Yr yield is at 3.87% and 3 m libor closed at 5.55%. Indian 10 yr benchmark yield closed at 7.09%.
Economic news: Fed hiked rates by 25 bps and left the door open for Sept rate hike. US economy grew faster than expected in the first quarter; the labor market cooled in June; and inflation slowed more than expected. Fed staff does not project recession. Fed Chairman does not expect inflation to come down to 2% till 2025. Fed Chief reiterated it remains watchful over incoming economic data to “assess the appropriate stance of monetary policy.”The real Fed funds rate, which adjusts for near term inflation expectations, is now in “meaningfully positive territory,” Powell said, adding that he continues to believe that the U.S. can avoid a recession.
Focus now shifts to ECB policy.
Data highlights: US New home sales declined to 697k.
Thursday’s calendar : – US Weekly jobless claims, durables order and pending home sales.
-ECB meeting.
| USD/INR | 82.03 | 81.87 | ||
| EUR/USD |
1.1091 |
1.1107 | 1.1037 | |
| GBP/USD |
1.2948 |
1.2961 | 1.2875 | |
| USD/JPY |
140.22 |
141.19 | 139.94 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.1074 | 1.1111 | 1.1144 | 1.1181 | 1.1041 | 1.1004 | 1.0971 |
| GBP/USD | 1.2921 | 1.2967 | 1.3007 | 1.3053 | 1.2881 | 1.2835 | 1.2795 |
| USD/JPY | 140.50 | 141.06 | 141.75 | 142.31 | 139.81 | 139.25 | 138.56 |
| USD/INR | 81.96 | 82.05 | 82.12 | 81.89 | 81.80 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.1010/1.0935 | 1.1275/1.1345 | UP | SIDE<1.1010 |
| GBP/USD | 1.2680 | 1.3420 | UP | SIDE<1.2680 |
| USD/JPY | 137.35/135.50 | 145.10 | UP | DN<137.45 |
| USD/INR | 81.67 | 82.20 | SIDE | DN<81.87 |
| USD/CHF | 0.8565/0.8440 | 0.8820 | DN | SIDE>0.8820 |
Technicals: Spot closed below 50 and 200 day moving averages.20 day moving average is at 82.14. 50 day moving average is at 82.29.200 day moving average is at 82.21. Daily MACD is in sell zone. Important support is at 81.67 and important resistance is at 81.94/82.20. Spot closed above the average level of the day.
Intraday supports and resistances for July contract are:
PP: 81.98, S1:81.92, S2:81.82, R1:82.08, R2:82.14.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD imports be hedged at 81.85/81.75.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Major resistance is at 1.1275/1.1340. Next major support is at 1.1015.. Daily MACD is in sell zone, implying an important top at 1.1275. Weekly MACD is in buy zone, implying important bottom at 1.0635.
GBP/USD: The pair is above 50,100 and 200 day moving averages . Daily MACD is in sell zone, implying important top at 1.3145 and weekly MACD is in buy zone, implying important bottom at 1.1803. Important supports are at 1.2680/1.2590. Important resistance is at 1.3145.
USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in buy zone, implying important bottom at 137.35. Important resistance is at 145 and support is at 137.50.
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