03/07/2018

USDINR opened at 68.48 Y’day and the pair traded in the 68.34-68.80 range. Spot USDINR closed at 68.79, gain of 33 ps for USD as against prior close of 68.46.RBI reference rate was fixed at 68.62. Rupee declined after hitting 68.33. Volatility continued for the fourth straight month. Rupee’s decline intensified since the start of this fiscal and intraday swings are also disproportionate to its normal behavior. July USD/INR closed at 68.99, gain of 28 ps for USD as compared to prior day’s close of 68.71. July Euro/INR closed at 80.38, GBP/INR at 90.83 and Yen/INR at 62.35.

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 declined 0.53% y’day. DOW climbed 55 points (0.23%) on Friday.Nikkei declined 2.21%  and Hang seng was closed y’day

Euro is now at 1.1632, Pound at 1.3132,Yen at 110.89.    

Commodities: Gold is now at USD 1239 and WT1Crude at USD 74.52.

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 7.91%.        

Economic news: Global stock markets led by China declined steeply as US President escalated trade tensions, calling EU as bad as China. European Union warned the United States that imposing import tariffs on cars and car parts would harm its own automotive industry and likely lead to counter-measures by its trading partners on $294 billion of U.S. exports.

EU PMI (mfrg) was finalized at 54.9, revised down from 55.0. That’s also an 18-month low. Markit noted that growth of output and new orders slowed further as upturn in new export business remains subdued.                                                                              

BoJ’s quarterly Tankan survey showed notable worsening in manufacturer’s sentiments in Q2. The Larger Manufacturing Index dropped to 21, down from 24 and missed expectation of 23. Large Non-Manufacturing index rose to 24, up from 23, beat expectation of 23. 

Data Highlights : US ISM(mfrg) climbed to 60.2, prices paid component climbed to 76.8 and construction spending climbed 0.4% m/m.

-EU unemployment rate dipped to 8.4%.

-UK PMI(mfrg) climbed marginally higher to 54.4.

Tuesday’s calendar: – US factory orders

-EU retail sales

-UK PMI(construction)

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 67.91. 50 day moving average is at 67.55. 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 above its average level of the day.  

Intra day supports and resistances for July contract are:

PP: 68.85,S1:68.70, S2:68.41, R1:69.14, R2:69.29.                                                              

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.