USDINR opened at 73.65 on Friday and the pair traded in the 73.47-73.67 range. Spot USDINR closed at 73.60 , gain of 7 ps for USD as against prior close of 73.53. RBI reference rate was fixed at 73.65 on Thursday. Oct USD/INR closed at 73.66, loss of 3 ps for USD as compared to prior day’s close of 73.69. Oct Euro/INR closed at 87.23, GBP/INR at 96.23 and Yen/INR at 70.27. RBI has been buying USD to stem Rupee gains. FII and FDI investment flows could have contributed to further Rupee strength, but for RBI buying.

FII’S nett bought Rs 15907 Cr of Indian Equities in Oct . FII’S nett bought Rs 2688 Cr of Indian debt securities in Sept . In this financial year, FII’S have nett bought Rs 95390 Cr of Equities and have sold Rs  25860 Cr in debt. In FY 19-20, FII’s have sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty climbed 0.28% on Friday. DOW declined 28 points (0.10%).Nikkei climbed 0.18% and Hang seng climbed 0.54%.

Euro closed the week at 1.1862,Pound at 1.3040,Yen at 104.69. 

Commodities: Gold is now at USD 1904 and WT1Crude at USD 39.75/Brent at USD 41.64.

Interest rates: USD 10 Yr yield is at 0.84% and 3 m libor closed at 0.25%. Indian 10 yr benchmark yield closed at 5.84%.

Economic news: EU and UK PMI composite (mfrg and services) highlighted the stark divergence between manufacturing and services. While services sector contracted, mfrg was strong . German manufactring growth was easily one of the best in decades. However, renewed restrictions in some EU countries poses risk of double dip downturn.

USD weakened as Global markets were mildly strong at weekend.

Data highlights: – EU PMI(mfrg) climbed to 54.4 and PMI(services) declined to 46.2.

-UK PMI(mfrg) inched higher to 53.3 and PMI(services)dipped to 52.3  and retail sales climbed 1.5% m/m.

Monday’s calendar: – US new home sales

-German ifo survey

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 200 day moving average. 20 day moving average is at 73.43. 50 day moving average is at 73.67.200 day moving average is at 74.10. Daily MACD is in buy zone, implying bottom at 73.03. Important support is at 73/72.70 and important resistance is at 73.80 and later at 73.98. Spot closed above its average level of the day.

Intra day supports and resistances for Oct contract are:

PP:73.61,S1:73.53, S2:73.40, R1:73.74, R2: 73.82.                        

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

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above major moving averages. Next Major resistance is at 1.1920 and later at 1.20. Major support is at 1.1610. Daily MACD is in buy zone, implying an important bottom at 1.1610. Weekly MACD is in sell zone, implying important top at 1.20.

GBP/USD: The pair is above all major moving averages. Daily MACD  is in buy zone, implying important bottom at 1.2674 and weekly MACD is  in sell zone, implying important top at 1.3484. Important support is at 1.2860/1.2670 . Important resistance is at 1.3175/1.3275.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 106.10. Next important resistance is at 106.10/107.50. Important support is at 104.10.

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