12/07/2018

 USDINR opened at 68.82 y’day and the pair traded in the 68.74-68.88 range. Spot USDINR closed at 68.77, loss of 4 ps for USD as against prior close of 68.81.RBI reference rate was fixed at 68.79.July USD/INR closed at 68.92, loss of 5 ps for USD as compared to prior day’s close of 68.97. July Euro/INR closed at 80.85, GBP/INR at 91.38 and Yen/INR at 62.05.

FII’S have bought Rs 496 Cr of Indian Equities in July till date . FII’S have bought Rs 854 Cr of Indian debt securities in June till date . On a cumulative basis, FII’S have bought Rupees 2034 Cr of Indian Equities till date for this calendar year and have sold  Rupees 40436 Cr of Indian debt in this calendar year till date.

Benchmark Nifty closed flat y’day. DOW declined 218 points (0.99%) y’day.Nikkei declined 1.19%  and Hang seng declined 1.29% y’day.

Euro is now at 1.1675, Pound at 1.3212,Yen at 112.08.    

Commodities: Gold is now at USD 1242 and WT1Crude at USD 70.60.

Interest rates: USD 10 Yr yield is at 2.84% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.87%.        

Economic news: Global asset markets tumbled,oil and metals fell sharply and USD gained as Trump administration announced the plan to impose tariffs on additional USD 200B of Chinese imports as follow up action to Section 301 investigation. The list of targeted products is released, including consumer items such as clothing, television components and refrigerators as well as other technology products. There will be 10% tariffs on the products, which could come into effect after public consultations end on August 30. After imposition, the Section 301 tariffs will cover as much as half of Chinese imports to the US.

China said that it will take the “necessary counter-measures and resolutely safeguard its legitimate rights and interests”.                                                                         

Chinese Ministry of Commerce said in a statement that it’s “shocked” and finds it “totally unacceptable” as the US accelerates the trade war escalation. It warned that the “irrational” action is “hurting China, hurting the world, and hurting itself. Also, China pledged to make “necessary counter measures” and call on the international community to defend against “trade hegemonism”. It will also file a complaint to the WTO again US unilateralist action.

Data Highlights : US PPI climbed 0.3% m/m.                      

Thursday’s calendar: – US CPI and weekly jobless claims

-EU industrial production                

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 68.41. 50 day moving average is at 67.86. 200 day moving average is at 65.50. Daily MACD is in buy zone, implying bottom at 66.85 . Important support zone is at 67.70 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: 68.94,S1:68.84, S2:68.78, R1:69.01, R2:69.10.                                                               

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.