FX MORNING UPDATE

USDINR opened at 71.24 y’day and the pair traded in the 71.22-71.56 range. Spot USDINR closed at 71.54 y’day, gain of 31 ps for USD as against prior close of 71.23. RBI reference rate was fixed at 71.01 on Monday. Oct USD/INR closed at 71.64, gain of 31 ps for USD as compared to prior day’s close of 71.33. Oct Euro/INR closed at 78.91, GBP/INR at 90.62 and Yen/INR at 66.18. Rupee declined despite narrower than expected trade deficit and surge in Indian Equities.

FII’S have nett sold  Rs 4656 Cr of Indian Equities in Oct . FII’S have nett bought Rs 40261 Cr of Indian Equities in this calendar Year till date. FII’S have nett sold Rs 932 Cr of Indian debt securities in Oct. FII’S have nett bought Rs 28217 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.77% y’day. DOW climbed 237 points(0.89%) y’day. Nikkei climbed 1.87%  and Hang seng declined 0.07% y’day.

Euro is now at 1.1028 ,Pound at 1.2754,Yen at 108.69.    

Commodities: Gold is now at USD 1482 and WT1Crude at USD 52.90./Brent at USD 58.80.

Interest rates: USD 10 Yr yield is at 1.75% and 3 m libor closed at 2.01%. Indian 10 yr benchmark yield closed at 6.49%.        

Economic news: Indian trade deficit narrowed to USD 10.86 bn in Sept as against USD 14.95 bn during the same period last year. Exports fell 6.53% to USD 26.03 bn. Imports was down 13.85% to USD 36.89 bn. Oil imports declined 18.33% to USD 8.98 bn. Exports is down 2.39% in Apr-Sept period to USD 159.57 bn. Imports contracted 7% to USD 243 bn.

 

Sterling rallied on hopes of brexit deal as EU and UK negotiators moved forward towards a new draft. Despite US President’s claim of a mini trade deal with China, uncertainities resurfaced as Chinese side expressed some apprehensions.

Data highlights : –  US NY mfrg index climbed to 4.

-EU and German Zew survey improved to -23.5 and -22.8 respectively.

-UK unemployment rate inched to 3.9%.

Wednesday’s calendar: – US retail sales and beige book

-EU CPI

-UK CPI, PPI and RPI

USD/INR   71.56 71.22
EUR/USD 1.1028 1.1046 1.0991
GBP/USD 1.2754 1.2799 1.2603
USD/JPY 108.69 108.90 108.15

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1024 1.1057 1.1079 1.1112 1.1002 1.0969 1.0947
GBP/USD 1.2721 1.2839 1.2917 1.3035 1.2643 1.2525 1.2447
USD/JPY 108.62

 

109.09 109.37 109.83 108.34 107.87 107.59

 

USD/INR 71.44 71.66 71.78   71.32 71.10  

 

                                                                                                                                               

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.0880 1.1110/1.1250 DN SIDE>1.1110
GBP/USD 1.2410/1.22 1.2710/1.2770 SIDE UP>1.2770
USD/JPY 106.50 109 SIDE UP>109
USD/INR 70.75/70.35 72 UP DN<70.85
USD/CHF 0.9840 1.0029 UP DN<0.9840

Technicals: Spot closed above 50 and 200 day moving average. 20 day moving average         is at 71.10. 50 day moving average is at 71.10.200 day moving average is at 70.18. Daily MACD is in buy zone, implying bottom at 70.35. Important support is at 71.35/70.75 and next important resistance is at 72 and later at 72.40. Spot closed above its average level of the day.  

Intra day supports and resistances for Oct contract are:

PP: 71.53,S1:71.40, S2:71.17, R1:71.76, R2:71.89                                           

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 1.1110. Major support is at 1.0840. Daily MACD is in buy zone, implying an important bottom at 1.0870. Weekly MACD is in sell zone, implying important top at 1.1415.

GBP/USD: The pair is bullish and is trading close to 200 day moving average.Daily MACD  is in buy zone, implying important bottom at 1.22 and weekly MACD is  in buy zone, implying important bottom at 1.20. Important resistance is at 1.2710/1.2770. Important support is at 1.2410 and later at 1.22.

USD/YEN: The pair is between  major moving averages. Daily MACD is in buy zone, implying important bottom at 106.50. Next important resistance is at 108.50/109.30. Important support is  at 106.50

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