USDINR opened  at 71.80 on Friday and the pair traded in the 71.68-72.87 range. Spot USDINR closed at 71.79 y’day, loss of 18 ps for USD as against prior close of 71.97. RBI reference rate was fixed at 72.05 on Thursday. Nov USD/INR closed at 71.86, loss of 18 ps for USD as compared to prior day’s close of 72.04. Nov Euro/INR closed at 79.34, GBP/INR at 92.46 and Yen/INR at 66.17.

Rupee declined 52 ps w/w. Rupee recovered from 72.24 as RBI sold USD along with selling by some foreign banks. Last week Rupee decline could be attributed  to higher inflation data, poor IIP data, paring of sell positions by USD sellers, stronger USD against majors and fears of entrenched GDP slow down. Moody’s action in changing outlook to negative from stable and continued USD buying by RBI at lower levels are also contributory factors to Rupee weakness. However, overall inflows is good and CNY is steady against USD. Rupee seems to have broken coorrelation with CNY.

FII’S nett bought  Rs 12445 Cr of Indian Equities in Nov . FII’S have nett bought Rs 72695 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 3710 Cr of Indian debt securities in Nov. FII’S have nett bought Rs 46868 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.2% on Friday. DOW climbed 222 points (0.80%) on Friday. Nikkei climbed 0.70%  and Hang seng climbed 0.01%  on Friday.

Euro closed the week at 1.1053 ,Pound at 1.2907,Yen at 108.75.

Commodities: Gold is now at USD 1468 and WT1Crude at USD 57.88./Brent at USD 63.35.

Interest rates: USD 10 Yr yield is at 1.835% and 3 m libor closed at 1.93%. Indian 10 yr benchmark yield closed at 6.52%.                                                                    

Economic news: Indian exports declined 1.1% to USD 26.4 bn in Oct. Imports contracted 16.3% to USD 37.4 bn. Trade deficit is at USD 11 bn. Oil imports declined 31.7% in Oct to USD 9.6 bn. Exports in Apr-Oct is at USD 186 bn (down 2.2%) and Imports has declined 8.4% in Apr-Oct to USD 280.7 bn.

Data highlights : – No major data release.

Friday’s calendar: – US retail sales climbed 0.3% m/m. Industrial production declined -0.8% m/m.

-EU CPI was finalized at 0.7% y/y

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day moving average. 20 day moving average       is at 71.14. 50 day moving average is at 71.23.200 day moving average is at 70.28. Daily MACD is in buy zone, implying bottom at 70.55. Important support is at 71.55/71.30 and next important resistance is at 72.45. Spot closed above its average level of the day.  

Intra day supports and resistances for Nov contract are:

PP: 71.84,S1:71.74, S2:71.63, R1:71.95, R2:72.05                                         

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 1.1180. Major support is at 1.10 and later at 1.0870. Daily MACD is in sell zone, implying an important topo at 1.1185. Weekly MACD is in buy zone, implying important bottom at 1.0870.

GBP/USD: The pair is sideways but is still trading above 200 day moving average.Daily MACD  is in sell zone, implying important top at 1.30 and weekly MACD is  in buy zone, implying important bottom at 1.20. Important resistance is at 1.30/1.31. Important support is at 1.27 and later at 1.2550.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 109.50. Next important resistance is at 110.65. Important support is  at 107.85/106.50.