FX MORNING UPDATE

USDINR opened at 72.80 on Friday and the pair traded in the 72.73-72.83 range. Spot USDINR closed at 72.75 , loss of 11 ps for USD as against prior close of 72.86. RBI reference rate was fixed at 72.77 on 11/02Feb USD/INR closed at 72.73, loss of 22 ps for USD as compared to prior day’s close of 72.95. Feb Euro/INR closed at 88, GBP/INR at 100.20 and Yen/INR at 69.27.

FII’S nett bought Rs 24936 Cr of Indian Equities in Feb . FII’S nett sold Rs 624 Cr of Indian debt securities in Jan . In this financial year, FII’S have nett bought Rs 255583 Cr of Equities and have sold Rs  25886 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty declined 0.07% on Friday. DOW climbed 27 points(0.09%).Nikkei declined 0.14% and Hang seng climbed 0.45% .

Euro closed the week at 1.2120,Pound at 1.3853,Yen at 104.92.  

Commodities: Gold is now at USD 1824 and WT1Crude at USD 59.72/Brent at USD 62.66.

Interest rates: USD 10 Yr yield is at 1.21% and 3 m libor closed at 0.23%. Indian 10 yr benchmark yield closed at 6.03%.

Economic news: USDINR traded to intraday low level of 72.73. However, USDINR declined to 72.60 in overseas NDF markets on Friday. Fwd premia continue to be firm with 1year at 5.10% p.a. 10 Year yield softened to 5.99% from last week high of 6.12%. Nifty climbed 1.6% last week.

Retail inflation declined to 4.06% in Jan as against 4.59% in Dec. Food inflation fell to 20 month low of 1.89%. According to RBIThe outlook for core inflation is likely to be impacted by further easing in supply chains; however, broad-based escalation in cost-push pressures in services and manufacturing prices due to an increase in industrial raw material prices could impart upward pressure,”.

IIP climbed 1% in Dec 2020. Mfrg grew 1.6%, power sector grew by 5.1%, mining contracted -4.8%. The industrial growth so far in the fiscal year 2020-21 (April-December) has contracted -13.5 percent, compared to a 0.3 percent rise in the corresponding period a year ago, the data showed. Auto sales climbed 11% in Jan.

Data highlights: – UK industrial production and manufacturing production climbed 0.2% and 0.3% respectively.

Monday’s calendar: – EU industrial production.

USD/INR   72.83 72.73
EUR/USD 1.2120 1.2135 1.2081
GBP/USD 1.3853 1.3864 1.3774
USD/JPY 104.92 105.19 104.72

Daily Support/Resistance table

currency pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.2112 1.2143  1.2166    1.2089 1.2058  
GBP/USD 1.3830 1.3885  1.3920   1.3796 1.3740  
USD/JPY 104.94

 

105.15  105.41   104.69 104.47

 

 

 

USD/INR 72.77 72.81 72.87   72.71 72.67

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1950 1.2145/1.2220/1.2350 SIDE UP>1.2150
GBP/USD 1.3565 1.4050 UP DN<1.3565
USD/JPY 104.40 105.70 SIDE DN<103.95
USD/INR 72.65 73.50/73.65 DN SIDE>73.95
USD/CHF 0.8890 0.8990/0.9045 DN UP>0.9045

Technicals: Spot closed below 100 and 200 day moving average. 20-day moving average is at 72.97. 50 day moving average is at 73.27.200 day moving average is at 74.27. Daily MACD is in sell zone, implying top at 73.50. Important support is at 72.6 5 and important resistance is at 73.50 . Spot closed below its average level of the day.

Intraday supports and resistances for Feb contract are:

PP:72.78,S1:72.61, S2:72.50, R1:72.89, R2: 73.06.                        

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

CROSS CURRENCY TECHNICALS:

EURO/USDThe pair is below 20 and 50 moving averages, but above 100 and 200 day moving average. Major resistance is at 1.2150. Major support is at 1.1950. Daily MACD is in buy zone, implying an important bottom at 1.1950. 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 1.3565 and weekly MACD is in the buy zone, implying the important bottom at 1.2675. Important support is at 1.3565 . Important resistance is at 1.4050.

USD/YEN: The pair is above 50 day major moving average, but still below 200 days moving average. Daily MACD is in sell zone, implying an important top at 105.75. Next important resistance is at 105.75. Important support is at 104.40/104.

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