FX MORNING UPDATE 

USDINR opened at 73.10 y’day and the pair traded in the 73.08-73.34 range. Spot USDINR closed at 73.32 , gain of 21 ps for USD as against prior close of 73.11. RBI reference rate was fixed at 73.10 on 05/01Jan USD/INR closed at 73.53, gain of 28 ps for USD as compared to prior day’s close of 73.25. Jan Euro/INR closed at 90.11, GBP/INR at 99.75 and Yen/INR at 70.93.

FII’S nett bought Rs 52883 Cr of Indian Equities in Dec . FII’S nett bought Rs 4681 Cr of Indian debt securities in Dec . In this financial year, FII’S have nett bought Rs 211793 Cr of Equities and have sold Rs  21789 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty closed flat y’day.DOW climbed 211 points (0.69%).Nikkei climbed 1.6% and Hang seng declined 0.52%.

Euro is now at 1.2245,Pound at 1.3552,Yen at 103.97.      

Commodities: Gold is now at USD 1914 and WT1Crude at USD 50.95/Brent at USD 54.50.

Interest rates: USD 10 Yr yield is at 1.09% and 3 m libor closed at 0.23%. Indian 10 yr benchmark yield closed at 5.89%.

Economic news: Indian GDP is expected to contract by -7.5% in this fiscal as per first advance estimates released by the Govt. The movement of various high-frequency indicators in recent months, points towards broad-based nature of resurgence of economic activity. The relatively more manageable pandemic situation in the country as compared to advanced nations has further added momentum to the economic recovery,” the government said in a press release.

FOMC minutes revealed that members unanimously supported keeping asset purchase pace unchanged. “All participants judged that it would be appropriate to continue those purchases at least at the current pace, and nearly all favored maintaining the current composition of purchases,” the minutes noted. “A couple of participants indicated that they were open to weighting purchases of Treasury securities toward longer maturities.”

US bond prices fell as markets bet a new Democrat-controlled government would lead to heavy spending and borrowing to support the U.S. economic recovery. Equities rallied and Crosses slumped on prospects of increased stimulus.

Data highlights: – -US weekly jobless claims was reported at 787k and ISM(non mfrg) climbed to 57.2.

-EU CPI declined -0.3% y/y, retail sales declined -6.1% m/m and factory orders climbed 2.3% m/m.

-UK PMI(construction) was reported at 54.6.

Friday’s calendar: US nonfarm payrolls

-German industrial production and unemployment rate

USD/INR   73.34 73.08
EUR/USD 1.2245 1.2345 1.2245
GBP/USD 1.3552 1.3633 1.3533
USD/JPY 103.97 103.96 102.96

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.2287 1.2329 1.2388 1.2430 1.2229 1.2186 1.2128
GBP/USD 103.57 104.18 104.57 105.19 103.18 102.57 102.18
USD/JPY 103.57

 

104.18 104.57 105.19 103.18 102.57

 

102.18

 

USD/INR 73.24 73.41 73.50   73.14 72.98  

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.2060/1.1985 1.2470 UP DN<1.19
GBP/USD 1.34/1.3135 1.3710 UP DN<1.31
USD/JPY 103/101.20 104.75/105.65 DN UP>104.75
USD/INR 72.90 73.40/73.55 DN SIDE>73.95
USD/CHF 0.8820/0.87 0.8980/0.9030 DN UP>0.9030

Technicals: Spot closed below 100 and 200 day moving average. 20 day moving average is at 73.47. 50 day moving average is at 73.84.200 day moving average is at 74.65. Daily MACD is in sell zone, implying top at 73.95. Important support is at 72.90 and important resistance is at 73.40/73.55 . Spot closed at average level of the day.

Intra day supports and resistances for Jan contract are:

PP:73.44,S1:73.32, S2:73.11, R1:73.65, R2: 73.77.                        

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

CROSS CURRENCY TECHNICALS:

EURO/USDThe pair is above all major moving averages. Next Major resistance is at 1.2470. Major support is at 1.2060/1.1960. Daily MACD is in buy zone, implying an important bottom at 1.1610. Weekly MACD is in buy zone, implying important bottom at 1.1610.

GBP/USD: The pair is above major moving averages . Daily MACD  is in buy zone, implying important bottom at 1.3135 and weekly MACD is  in buy zone, implying important bottom at 1.2675. Important support is at 1.3225/1.31355 . Important resistance is at 1.3710.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 104.75. Next important resistance is at 104.75/105.70. Important support is at 103/101.20.

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