FX – Morning Update

FX MORNING UPDATE                                                                                      

USDINR opened at 71.35 Y’day and the pair traded in the 71.28-71.44 range. Spot USDINR closed at 71.30 y’day, loss of 10 ps for USD as against prior close of 71.40. RBI reference rate was fixed at 71.23 y’day. Feb USD/INR closed at 71.38, loss of 2 ps for USD as compared to prior day’s close of 71.40. Feb Euro/INR closed at 78.04, GBP/INR at 92.31 and Yen/INR at 65.08.

FII’S nett sold  Rs 1172 Cr of Indian Equities in Feb till date . FII’S have nett bought Rs 4248 Cr of Indian debt securities in Feb till date.

Benchmark Nifty climbed 0.63% y’day. DOW closed flat (0.00%) y’day. Nikkei declined 0.60% and Hang seng climbed 1.26% y’day.

Euro is now at 1.0920,Pound at 1.2967,Yen at 109.89.     

Commodities: Gold is now at USD 1570 and WT1Crude at USD 50.50/Brent at USD 54.85.

Interest rates: USD 10 Yr yield is at 1.563% and 3 m libor closed at 1.89%. Indian 10 yr benchmark yield closed at 6.44%.

Economic news: Fed Chairman pointed out that the current low interest rate environment means “it would be important for fiscal policy to help support the economy if it weakens”. In the Semiannual Monetary Policy Report to the Congress, Fed Chair Jerome Powell warned that while “some of the uncertainties around trade have diminished recently, but risks to the outlook remain. In particular, Fed is ” closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy.”

Focus is on Indian IIP and CPI data.

Data highlights : UK GDP was flat q/q, Industrial and manufacturing production climbed 0.1% and 0.3% respectively.

Wednesday’s calendar: – – EU industrial production.

USD/INR   71.32 71.19
EUR/USD 1.0920 1.0925 1.0892
GBP/USD 1.2967 1.2968 1.2895
USD/JPY 109.89 109.96 109.72

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.0912 1.0932 1.0945 1.0965 1.0899 1.0879 1.0866
GBP/USD 1.2940 1.2985 1.3013 1.3058 1.2912 1.2867 1.2839
USD/JPY 109.84

 

109.96 110.08 110.19 109.72 109.60 109.48

 

USD/INR 71.26 71.33 71.39   71.20 71.13  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.0865 1.1065/1.11 DN SIDE>1.1140
GBP/USD 1.2780 1.3285/1.3515 SIDE UP>1.3285
USD/JPY 108.30 110.30 UP DN<108.30
USD/INR 70.73/70.55 71.65 SIDE DN<71.03
USD/CHF 0.96 0.9840 DN UP>0.9840

                                                                                                                                               

Technicals: Spot closed above 200 day moving average. 20 day moving average is at 71.24. 50 day moving average is at 71.20.200 day moving average is at 70.39. Daily MACD is in sell zone, implying top at 71.65. Important support is at 71.10/70.73 and next important resistance is at 71.65. Spot closed above its average level of the day.  

Intra day supports and resistances for Feb contract are:

PP: 71.36,S1:71.30, S2:71.22, R1:71.44, R2:71.50                                     

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 1.1240. Major support is at 1.0870. Daily MACD is in sell zone, implying an important top at 1.1240. Weekly MACD is in sell zone, implying important top at 1.1240.

GBP/USD: The pair has turned sideways but still above major moving averages.Daily MACD  is in sell zone, implying important top at 1.3285 and weekly MACD is  in sell zone, implying important top at 1.3515. Important resistance is at 1.3285. Important support is at 1.2780.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 108.30. Next important resistance is at 110.30. Important support is  at 108.50/107.70/ 106.50.

 

 

 

 

 

 

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