USDINR opened gap up at 70.06 y’day and the pair traded in the 70.06-70.75 range. Spot USDINR closed at 70.73 on Friday, gain of One Rupee and eleven ps for USD as against prior close of 69.62. RBI reference rate was fixed at 69.39 on Friday. Aug USD/INR closed at 70.94, gain of One Rupee and 18 ps for USD as compared to prior day’s close of 69.76. Aug Euro/INR closed at 79.39, GBP/INR at 86.36 and Yen/INR at 66.94.
Rupee has declined two Rupees in four trading sessions. Decline in Yuan due to fresh trade issues weighed down on Rupee. Equity markets had roller coaster ride and ended lower. Yuan breached 7 to USD. EM Currencies declined in tandem with Yuan weakness. China has pledged to stabilize Yuan fall.
FII’S have nett sold Rs 13315 Cr of Indian Equities in July . FII’S have nett bought Rs 65500 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 8417 Cr of Indian debt securities in July. FII’S have nett bought Rs 18783 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 1.23% y’day. DOW declined 98 points(0.37%) y’day. Nikkei declined 1.74% and Hang seng declined 2.85% y’day.
Euro is now at 1.1108 ,Pound at 1.2158,Yen at 106.61.
Commodities: Gold is now at USD 1453 and WT1Crude at USD 55.20/Brent at USD 61.30.
Interest rates: USD 10 Yr yield is at 1.845% and 3 m libor closed at 2.26%. Indian 10 yr benchmark yield closed at 6.39%.
Economic news: Chinese Yuan dropped sharply in Asian session partly in response to trade war escalation with US. The PBoC set its daily reference rate at just a slightly weaker level than 6.9 for the first time since December. China has pledged to stabilize Yuan fall. US decision to impose additional tariffs on Chines imports have outweighed Fed’s rate cut.
Focus is on RBI Credit policy.
Data highlights : – US ISM(non mfrg) dipped to 53.7.
-EU PMI(services) was reported at 53.2 and sentix investor confidence declined to -13.7.
-UK PMI(services) climbed marginally to 51.4.
Tuesday’s calendar: – German factory orders
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 50 and 100 day moving averages. 20 day moving average is at 68.92. 50 day moving average is at 69.15.200 day moving average is at 70.40. Daily MACD is in buy zone, implying bottom at 68.30. Next support is at 70. Important support is at 70 and later at 69.10 and next important resistance is at 71.80. Spot closed above its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 70.67,S1:70.40, S2:69.87, R1:71.20, R2:71.47
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Next Major resistance is at 1.1415. Major support is at 1.1025. Daily MACD is in sell zone, implying an important top at 1.1415. Weekly MACD is in sell zone, implying important top at 1.1415.
GBP/USD: The pair is bearish and is trading below major moving averages.Daily MACD is in sell zone, implying important top at 1.2580 and weekly MACD is in sell zone, implying important top at 1.3385. Important resistance is at 1.2380 and later at 1.2580. Important support is at 1.20.
USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 109. Next important resistance is at 109 and later at 110.50. Important support is at 104.50.