22/03/2019
USDINR opened at 69.04 on Wednesday and the pair traded in the 68.72-69.17 range. Spot USDINR closed at 68.83, loss of 12 ps for USD as against prior close of 68.95. RBI reference rate was fixed at 68.86. March USD/INR closed at 68.88, loss of 17 ps for USD as compared to prior day’s close of 69.05. March Euro/INR closed at 78.27, GBP/INR at 91.15 and Yen/INR at 61.82. Mumbai FX market was closed y’day for Holi.
FII’S have invested Rs 17054 Cr in Indian Equities in March. FII’S have nett bought Rs 31878 Cr of Indian Equities in this calendar Year till date. FII’S have invested Rs 5849 Cr of Indian debt securities in March. FII’S have nett sold Rs 6042 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 0.10% on Wednesday. DOW climbed 216 points (0.84%) Y’day. Nikkei climbed 0.20% and Hang seng declined 0.85% y’day..
Euro is now at 1.1376, Pound at 1.3142,Yen at 110.78.
Commodities: Gold is now at USD 1308 and WT1Crude at USD 59.87/Brent at USD 67.76.
Interest rates: USD 10 Yr yield is at 2.532% and 3 m libor closed at 2.61%. Indian 10 yr benchmark yield closed at 7.36%.
Economic news: Fed statement was more dovish than expected. Fed will remain patient and will stop shrinking its balance sheet. Federal funds rates are projected to be at: 2.4% in 2019, revised down from 2.9%; 2.6% in 2020, revised down from 3.1%; 2.6% in 2021, revised down from 3.1%.
GDP growth is projected to be at: 2.1% in 2019, revised down from 2.3%; 1.9% in 2020, revised down from 2.0%; 1.8% in 20201, unchanged.
Unemployment rate is projected to be at; 3.7% in 2019, revised up from 3.5%; 3.8% in 2020, revised up from 3.6%; 3.9% in 2021, revised up from 3.8%. Core PCE inflation is projected to be at: 2.0% in 2019, unchanged; 2.0% in 2020, unchanged; 2.0% in 2021, unchanged.
Market watchers fear recession as the most reliable indicator – difference between 3 and 10 Year yield is on the brink of inversion.
US President said that punitive tariff on Chinese products could stay longer till China complies with any trade deal, if done. This is likely to derail the trade negotiation process.
UK PM formally sought BREXIT extension till June end. EU is yet to commit itself on granting extension.
BoE kept Bank Rate at 0.75% and asset purchase target at GBP 435B as widely expected. Both decisions were made by unanimous 9-0 vote. The central bank noted that economic data has been mixed since last meeting, but February Inflation Report projections “appear on track”.
BoE also noted that shifting expectations about the potential nature and timing Brexit have continued to generate volatility in UK asset prices, particularly the sterling exchange rate. Uncertainties also continue to weigh on confidence and short-term economic activity, notably business investment. Employment growth has been strong and indicators of consumer spending point to ongoing modest growth.
Data highlights : -US Weekly jobless claims dipped to 221k.
-UK CPI climbed 1.9% y/y, RPI climbed 2.5% y/y and PPI(output) climbed 0.1% m/m. Retail sales climbed 0.4% m/m.
Friday’s calendar: – US existing home sales
-EU PMI(mfrg) and PMI(services)
| USD/INR | 69.17 | 68.72 | |
| EUR/USD | 1.1376 | 1.1437 | 1.1343 |
| GBP/USD | 1.3142 | 1.3228 | 1.3005 |
| USD/JPY | 110.78 | 110.96 | 110.30 |
Daily Support/Resistance table
| CurrencyPairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.1384 | 1.1425 | 1.1479 | 1.1520 | 1.1331 | 1.1289 | 1.1236 |
| GBP/USD | 1.3121 | 1.3237 | 1.3344 | 1.3460 | 1.3014 | 1.2898 | 1.2790 |
| USD/JPY | 110.69
|
111.08 | 111.35 | 111.74
|
110.42 | 110.03 | 109.76
|
| USD/INR | 68.90 | 69.09 | 69.35 | 68.63 | 68.45 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Curency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.1175 | 1.1350/1.1490 | DN | UP>1.1520 |
| GBP/USD | 1.2950 | 1.3350/1.3575 | UP | DN<1.2950 |
| USD/JPY | 110 | 112.10 | UP | DN<110 |
| USD/INR | 68.30 | 69.10/69.30 | DN | SIDE>70.40 |
| USD/CHF | 0.9970 | 1.0120 | UP | DN <0.9970 |
Technicals: Spot closed below all major moving averages. 20 day moving average is at 70.16. 50 day moving average is at 70.72. 200 day moving average is at 70.50. Daily MACD is in sell zone, implying top at 71.84. Important support zone is at 68.30.Important resistances are at 69.30 and later at 69.80.Spot closed below its average level of the day.
Intra day supports and resistances for March contract are:
PP: 68.94,S1:68.67, S2:68.47, R1:69.14, R2:69.41.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below all major moving averages. Next Major resistance is at 1.1350 and later at 1.1490. Major support is at 1.1170. Daily MACD is in buy zone, implying an important bottom at 1.1170. Weekly MACD is in buy zone, implying important bottom at 1.1170.
GBP/USD: The pair is bullish and trading above major moving averages.Daily MACD is in buy zone, implying important bottom at 1.2950 and weekly MACD is in buy zone, implying important bottom at 1.2440. Important resistance is at 1.3350 and later at 1.3575. Important support is at 1.2950.
USD/YEN: The pair is above all major moving averages. Daily MACD is in sell zone, implying important top at 112.10. Next important resistance is at 112.10. Important support is at 110.
