FX MORNING UPDATE  

USDINR opened at 74.75 on Friday and the pair traded in the 74.69-74.90 range. Spot USDINR closed at 74.81 , loss of 4 ps for USD as against prior close of 74.85. RBI reference rate was fixed at 74.78 on Friday. Aug USD/INR closed at 75, gain of 3 ps for USD as compared to prior day’s close of 74.97. Aug Euro/INR closed at 88.68, GBP/INR at 98.44 and Yen/INR at 71.50.

FII’S have nett bought Rs 1130 Cr of Indian Equities in July . FII’S have nett sold Rs 887 Cr of Indian debt securities in July. In FY 19-20, FII’s have sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty declined 0.26% on Friday. DOW climbed 114 points (0.44%) on Friday.Nikkei declined 2.82% and Hang seng declined 0.47% on Friday.

Euro closed the week at 1.1777,Pound at 1.3132,Yen at 104.26. 

Commodities: Gold is now at USD 1975 and WT1Crude at USD 40.44/Brent at USD 43.64.

Interest rates: USD 10 Yr yield is at 0.53% and 3 m libor closed at 0.27%. Indian 10 yr benchmark yield closed at 5.85%.

Economic news: US Equity indices staged a late recovery on Friday as investors overcame corona anxiety and focussed on Big tech company earnings. Apple jumped 10%, Facebook ralled 8% and Amazon climbed 4%. US Congress is still in an impasse over the next round of stimulus. Five major central banks have unleashed USD 5 trn in asset purchases and that liquidity has supported the market despite rising infections.

Eurozone GDP contracted -12.1% qoq in Q2, slightly worse than expectation of -12.0% qoq. Over the year, GDP contracted -15.0% yoy. Canada GDP grew 4.5% mom in May, better than expectation of 3.1% mom.

Data highlights : – US Personal income declined -1.1% m/m, spending climbed 5.6% m/m and Core PCE index climbed 0.2% m/m.

-German retail sales declined -1.6% m/m and CPI(flash) climbed 0.4% y/y.

Monday’s calendar: US ISM (mfrg) and construction spending

-EU PMI(services)

-UK PMI(services)

USD/INR   74.90 74.69
EUR/USD 1.1777 1.1910 1.1760
GBP/USD 1.3090 1.3171 1.3069
USD/JPY 105.89 106.17 104.18

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1815 1.1871  1.1966    1.1720 1.1665  
GBP/USD 1.3110  1.3151 1.3212    1.3049 1.3008  
USD/JPY 105.41

 

 106.64  107.41   104.65 103.41  

 

USD/INR 74.80 74.91 75.01   74.70 74.59  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1625/1.1540 1.19/1.21 UP DN<1.1420
GBP/USD 1.28/1.2670 1.32 UP SIDE<1.2670
USD/JPY 104.10 106/106.60/107.45 DN UP>106.65
USD/INR 74.50 75.50 DN UP>75.50
USD/CHF 0.9050 0.9350 DN UP>0.9350

Technicals: Spot closed above 200 day moving average. 20 day moving average is at 74.95. 50 day moving average is at 75.38.200 day moving average is at 73.35. Daily MACD is in buy zone, implying bottom at 74.50. Important support is at 74.50 and important resistance is at 75.50. Spot closed above its average level of the day.

Intra day supports and resistances for Aug contract are:

PP:74.98,S1:74.87, S2:74.75, R1:75.10, R2: 75.21                         

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day major moving average. Next Major resistance is at 1.21. Major support is at 1.1420. Daily MACD is in buy zone, implying an important bottom at 1.1165. Weekly MACD is in buy zone, implying important bottom at 1.0650.

GBP/USD: The pair has turned bullish and is above major major moving average.Daily MACD  is in buy zone, implying important bottom at 1.2250 and weekly MACD is  in buy zone, implying important bottom at 1.14. Important support is at 1.2810 and later at 1.2670. Important resistance is at 1.32.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 108.15. Next important resistance is at 106 and later at 106.65. Important support is at 104.10.

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