02/07/2018                                                                                     

USDINR opened gap down at 68.69 on Friday and the pair traded in the 68.36-68.69 range. Spot USDINR closed at 68.46, loss of 33 ps for USD as against prior close of 68.79.RBI reference rate was fixed at 68.57. Rupee recovered despite rally in crude prices. Rupee recovery could be attributed to sharp political focus on weakness of Rupee. Senior Ministers had to defend and assure investors as the Govt faced criticism over Rupee sliding to all-time lows. July USD/INR closed at 68.71, loss of 32 ps for USD as compared to prior day’s close of 69.03. July Euro/INR closed at 80.20, GBP/INR at 90.45 and Yen/INR at 62.22.

FII’S have sold Rs 3637 Cr of Indian Equities in June till date . FII’S have sold 10043 Cr of Indian debt securities in June till date . On a cumulative basis, FII’S have sold Rupees 200 Cr of Indian Equities till date for this calendar year and have sold  Rupees 41356 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 1.18% on Friday. DOW climbed 55 points (0.23%) on Friday.Nikkei climbed 0.15%  and Hang seng climbed 1.6% on Friday.

Euro closed the week at 1.1684, Pound at 1.3211,Yen at 110.77.

Commodities: Gold is now at USD 1254 and WT1Crude at USD 74.30.

Interest rates: USD 10 Yr yield is at 2.85% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.90%.        

Economic news: US President tweeted asking Saudi Arabia to increase Oil production to 2mbpd as against OPEC agreement of a combined 1mbpd increase. US wants Oil producing nations to compensate for Iranian and Venezuelan Oil shortage due to US sanctions.

Focus is on US jobs data and Global manufacturing data.

 Data Highlights : US personal income rose 0.4% m/m, spending climbed 0.2% m/m, Core PCE index climbed 0.2% m/m and Chicago PMI climbed 64.1. Data were all in line with expectation.

-EU CPI(flash) climbed 2% y/y, in line with consensus.

-Japanese unemployment rate declined to 2.2% and industrial production declined -0.2% m/m, housing starts climbed 1.3% y/y.

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

-EU PPI and unemployment rate

-UK PMI(mfrg)

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 67.75. 50 day moving average is at 67.49. 200 day moving average is at 65.32. Daily MACD is in buy zone, implying bottom at 66.85 . Important support zone is at 67.80 and later at 66.85. Important resistance is at 69.10. Spot closed below its average level of the day.  

Intra day supports and resistances for July contract are:

PP: 68.80,S1:68.66, S2:68.44, R1:69.02, R2:69.16.                                                              

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

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below all major moving averages. Next Major resistance is at 1.1850 and later at 1.1960. Major support is at 1.1508. Daily MACD is in buy zone, implying an important bottom at 1.1508. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in buy zone, implying important bottom at 1.3050 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.3475 and later at 1.3550. Important support is at 1.3050.     

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.35. Next important support is at 108.10. Important resistance is  110.92 and later at 111.40.