FX MORNING UPDATE

USDINR opened at 69.56 y’day and the pair traded in the 69.50-69.80 range. Spot USDINR closed at 69.70 y’day, unchanged for USD as against prior close of 69.70. RBI reference rate was fixed at 69.80 on Tuesday. June USD/INR closed at 69.76, unchanged for USD as compared to prior day’s close of 69.76. June Euro/INR closed at 78.27, GBP/INR at 87.84 and Yen/INR at 64.39.

FII’S have nett bought  Rs 339 Cr of Indian Equities in June . FII’S have nett bought Rs 78223 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 6953 Cr of Indian debt securities in June. FII’S have nett bought Rs 9631 Cr of Indian debt in this calendar year till date.

Benchmark Nifty closed flat y’day. DOW climbed 38 points (0.15%) y’day. Asian markets are trading marginally higher today.

Euro is now at 1.1271 ,Pound at 1.2687,Yen at 107.63     

Commodities: Gold is now at USD 1384 and WT1Crude at USD 54.66/Brent at USD 62.60.

Interest rates: USD 10 Yr yield is at 2.03% and 3 m libor closed at 2.61%. Indian 10 yr benchmark yield closed at 6.84%.        

Economic news: Federal Reserve kept its benchmark unchanged but struck a more dovish tone in its latest policy statement. Fed elected to keep the benchmark interest rate within its target range of 2.25% to 2.5%, but new economic projections show more Fed officials seeing the case for a rate cut — or two — by the end of 2020.

 

Fed Chairman stated that “While the baseline outlook remains favorable, the question is whether these uncertainties will continue to weigh on the outlook and thus call for additional monetary policy accommodation,’’.

The Fed also released a fresh print of economic projections, which included new “dot plots” that map out policysetting members’ preferred rate paths through the next three years.The median dot reflected no rate changes through the rest of 2019, and one 25-basis point rate cut in 2020. The previous dot plots in March (before trade tensions escalated and economic data softened) also had the median dot calling for no rate changes by the end of 2019, but projected a rate hike in 2020.

Data highlights : — -UK CPI climbed 2% y/y, PPI(output) climbed 0.3% m/m and RPI climbed 3% y/y

Thursday’s calendar: – US Weekly jobless claims.

UK retail sales and BOE rate decision.

 

USD/INR   69.80 69.50
EUR/USD 1.1271 1.1254 1.1187
GBP/USD 1.2687 1.2674 1.2543
USD/JPY 107.63 108.62 107.90

 

                                                                                                                                               

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1226 1.1265 1.1293 1.1332 1.1198 1.1159 1.1131
GBP/USD 1.2624 1.2705 1.2755 1.2836 1.2574 1.2493 1.2443
USD/JPY 108.21

 

108.52 108.93 109.23

 

107.80 107.49 107.08

 

USD/INR 69.66 69.83 69.97   69.52 69.35  

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1110/1.0970/1.0840 1.1375 SIDE UP>1.1375
GBP/USD 1.2650 1.2865/1.3175 DN UP>1.30
USD/JPY 107.70 110.65 DN UP>110.85
USD/INR 69.45/69.25 70.06 DN UP>70.50
USD/CHF 0.9715 1.0050 DN  UP >1.0080

Technicals: Spot closed between major moving averages. 20 day moving average is at 69.62. 50 day moving average is at 69.62.200 day moving average is at 70.85. Daily MACD is in buy zone, implying bottom at 69.06. Next support is at 69.06. Important resistance is at 70.06 and later at 70.50 .Spot closed above its average level of the day.  

Intra day supports and resistances for June contract are:

PP: 69.73,S1:69.59, S2:69.42, R1:69.90, R2:70.04.                                                          

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 major moving average and hence bearish. Next Major resistance is at 1.1375. Major support is at 1.1110 and later at 1.0970. Daily MACD is in buy zone, implying an important bottom at 1.1106. 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 buy zone, implying important bottom at 1.2558 and weekly MACD is  in sell zone, implying important top at 1.3385. Important resistance is at 1.2865. Important support is at 1.2560.

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 107.75.

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