FX MORNING UPDATE

USDINR opened at 69.38 y’day and the pair traded in the 69.19-69.45 range. Spot USDINR closed at 69.27 y’day, gain of 1 ps for USD as against prior close of 69.26. RBI reference rate was fixed at 69.43 on Monday. June USD/INR closed at 69.42, unchanged for USD as compared to prior day’s close of 69.42. June Euro/INR closed at 78.09, GBP/INR at 88.22 and Yen/INR at 64.21.

FII’S have nett bought  Rs 8832 Cr of Indian Equities in May . FII’S have nett bought Rs 76891 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 1868 Cr of Indian debt securities in May. FII’S have nett bought Rs 758 Cr of Indian debt in this calendar year till date.

Benchmark Nifty declined 1.48% y’day. DOW climbed 181 points (0.71%) y’day. Nikkei declined 0.01% and Hang seng climbed 0.26 % y’day.

Euro is now at 1.1267 ,Pound at 1.2696,Yen at 108.50.    

Commodities: Gold is now at USD 1337 and WT1Crude at USD 53.30/Brent at USD 62.50.

Interest rates: USD 10 Yr yield is at 2.124% and 3 m libor closed at 2.61%. Indian 10 yr benchmark yield closed at 6.93%.        

Economic news: RBI cut rates by 25 bps and changed its stance to accomodatory. GDP for 2019-20 is expected to be 7%. There was no specific formula for liquidity injection and help to cash starved NBFC’S. Equity markets led by banking stocks sunk as rating agencies downgraded DHFL CP papers to junk.

ECB left interest rates unchanged today as widely expected. That is, main refinancing, marginal lending and deposit rates are kept at 0.00%, 0.25% and -0.40% respectively. ECB changed the forwards guidance and said interest rates will remain at present levels “at least through the first half of 2020, longer than “the end of 2019”. ECB Chief        noted that “most recent information indicates that global headwinds continue to weigh on the euro area outlook”. And, “the prolonged presence of uncertainties, related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets, is leaving its mark on economic sentiment.” Eurozone Q1 GDP growth was finalized at 0.4% qoq, unrevised. Over the year, Eurozone GDP grew 1.2% yoy. EU28 growth was finalized at 0.5% qoq, 1.5% yoy

Data highlights : US weekly jobless claims was unchanged at 218k and trade deficit for April is at USD 50.8 bn. US-China trade deficit expanded to USD 29.4 bn.

Friday’s calendar: – US nonfarm payrolls and unemployment rate

-German industrial production.

USD/INR   69.44 69.19
EUR/USD 1.1267 1.1308 1.1219
GBP/USD 1.2696 1.2743 1.2669
USD/JPY 108.50 108.57 108.03

 

 

                                                                                                                                               

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1267 1.1315 1.1357 1.1405 1.1226 1.1177 1.1136
GBP/USD 1.2702 1.2735 1.2776 1.2809 1.2661 1.2628 1.2588
USD/JPY 108.35

 

108.67 108.89 109.21

 

108.13 107.81 107.59

 

USD/INR 69.30 69.41 69.56   69.15 69.04  

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1110/1.0970/1.0840 1.1265/1.1325 DN UP>1.1325
GBP/USD 1.2480 1.2770/1.2865/1.3175 DN UP>1.30
USD/JPY 108.50/107.50 109/110.65 DN UP>110.85
USD/INR 68.90/68.30 69.75/70.06 DN UP>70.50
USD/CHF 0.9950 1.0125 SIDE  UP >1.0125

Technicals: Spot closed below major moving averages. 20 day moving average is at 69.82. 50 day moving average is at 69.51.200 day moving average is at 70.80. Daily MACD is in sell zone, implying top at 70.54. Next support is at 68.85. Important resistance is at 69.75 and later at 70.05 .Spot closed below its average level of the day.  

Intra day supports and resistances for June contract are:

PP: 69.44,S1:69.29, S2:69.17, R1:69.56, R2:69.71.                                                         

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 1.1265. Major support is at 1.1110 and later at 1.0970. Daily MACD is in sell zone, implying an important top at 1.1265. Weekly MACD is in sell zone, implying important top at 1.1570.

GBP/USD: The pair is bearish and is trading below major moving averages.Daily MACD  is in sell zone, implying important top at 1.3175 and weekly MACD is  in sell zone, implying important top at 1.3385. Important resistance is at 1.2775 and later at 1.2865. Important support is at 1.2480

USD/YEN: The pair is below  major moving averages. Daily MACD is in sell zone, implying important top at 112.40. Next important resistance is at 110.70 and later at 112.40. Important support is at 108.50 and later at 107.75.

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