USDINR opened at 70.98 y’day and the pair traded in the 70.62-70.99 range. Spot USDINR closed at 70.89 y’day, gain of 7 ps for USD as against prior close of 70.82. RBI reference rate was fixed at 70.72 y’day. Aug USD/INR closed at 71.03, gain of 2 ps for USD as compared to prior day’s close of 71.01. Aug Euro/INR closed at 79.61, GBP/INR at 86.35 and Yen/INR at 66.95.
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 0.85% y’day. DOW declined 22 points(0.09%) y’day. Nikkei declined 0.33% and Hang seng climbed 0.08% y’day.
Euro is now at 1.1211 ,Pound at 1.2172,Yen at 106.20.
Commodities: Gold is now at USD 1512 and WT1Crude at USD 52.60/Brent at USD 57.75.
Interest rates: USD 10 Yr yield is at 1.684% and 3 m libor closed at 2.26%. Indian 10 yr benchmark yield closed at 6.37%.
Economic news: RBI cut repo rates by 35 bps and reverse repo by 25 bps. GDP for 2019-20 has been revised lower to 6.9% and inflation is expected to be 3.1%. MPC maintained accommodative stance and added that the slowdown is cyclical and not structural. RBI also allowed banks to classify loans to NBFCs for key areas such as agriculture, housing and small and medium businesses – up to certain limits – as priority sector lending. RBI has also allowed banks to increase their exposure to a single non-banking finance company (NBFC). The move was aimed at boosting credit to cash-strapped NBFC’s.
US President lambasted Fed again for increasing rates last year and called them incompetent.
Gold rallied and stocks slumped as trade issues and US President’s attack on Fed weighed down on investor sentiment and boosted safe haven flows.
Data highlights : – – German industrial production declined -1.5% m/m.
Thursday’s calendar: US weekly jobless claims
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 69.15. 50 day moving average is at 69.22.200 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: 71.02,S1:70.75, S2:70.49, R1:71.29, R2:71.55
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.