FX MORNING UPDATE

USDINR opened at 72.41 Y’day and the pair traded in the 72.27-72.47 range. Spot USDINR closed at 72.43 , gain of 6 ps for USD as against prior close of 72.37. RBI reference rate was fixed at 72.37 on 22/03Mar USD/INR closed at 72.54, gain of 12 ps for USD as compared to prior day’s close of 72.42. Mar Euro/INR closed at 86.23, GBP/INR at 99.91 and Yen/INR at 66.87.

FII’S nett bought Rs 22373 Cr of Indian Equities in Mar (as on 18/3) . FII’S nett sold Rs 8723 Cr of Indian debt securities in March (as on 18/3) . In this financial year, FII’S have nett bought Rs 280938 Cr of Equities and have sold Rs  39347 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty climbed 0.53% y’day. DOW declined 308 points(0.94%).Nikkei declined 0.61% and Hang seng declined 1.34% .

Euro is now at 1.1845,Pound at 1.3735,Yen at 108.57.      

Commodities: Gold is now at USD 1726 and WT1Crude at USD 58/Brent at USD 61.

Interest rates: USD 10 Yr yield is at 1.61% and 3 m libor closed at 0.23%. Indian 10 yr benchmark yield closed at 6.145%.

Economic news: Rupee declined to 72.47 on RBI intervention. Rupee gained to 72.28 in midafternoon trade. Fwd premia continued to harden, with 1 year inching to 5.35% p.a.

Fed Chairman said that there is no risk of inflation. US Treasury Secy said that US economic recovery is at risk.

Data highlights: – US new home sales declined to 775k.

-UK claimant count change was reported at 86.6 k and unemployment rate dipped to 4.8%.

 Wednesday’s calendar: – US durables order

-EU PMI(mfrg-flash) and PMI(services-flash)

-UK PPI, RPI , CPI and PMI(mfrg-flash)

USD/INR   72.47 72.27
EUR/USD 1.1845 1.1941 1.1836
GBP/USD 1.3735 1.3863 1.3723
USD/JPY 108.57 108.88 108.40

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1872 1.1908 1.1977 1.2013 1.1803 1.1767 1.1698
GBP/USD 1.3773 1.3823 1.3912 1.3962 1.3683 1.3634 1.3544
USD/JPY 108.60

 

108.80 109.07 109.27 108.32 108.13

 

107.85

 

USD/INR 72.39 72.51 72.59   72.31 72.19  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.1845 1.1990/1.2055 SIDE DN<1.1845
GBP/USD 1.3760/1.3560 1.40/1.4240 UP SIDE<1.3760
USD/JPY 108.35/106.20 109.40/112.20 UP DN<106.20
USD/INR 72.30 72.60/72.90/73.25 DN SIDE>72.80
USD/CHF 0.92/0.91 0.9375/0.9540 UP DN<0.9050

Technicals: Spot closed closed below major moving averages. 20 day moving average is at 72.78. 50 day moving average is at 72.88.200 day moving average is at 73.95. Daily MACD is in sell zone, implying top at 73.78. Important support is at 72.30 and important resistances are at 72.60/72.95/73.30 . Spot closed above its average level of the day.

Intra day supports and resistances for Mar contract are:

PP:72.50,S1:72.39, S2:72.25, R1:72.64, R2: 72.75                        

Hedging strategy : Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

Upside break of 74 could end Rupee’s multi month upward trend. Expect 72.30-73.80 trading range till either side is broken.

Importer hedging should be done on dips to 72.30 and exports can be sold till 73.80 is not broken. If 73.80 is broken, exporters could wait for a higher level to hedge.

EURINR has entered bearish mode.Exporters can hedge on uptick to 87.50/88 and importers can buy EURINR for hedging near payment period.

 CROSS CURRENCY TECHNICALS:

EURO/USDThe pair is below 50 moving average, but above 200 day moving average. Major resistance is at 1.2130. Major support is at 1.1845. Daily MACD is in buy zone, implying an important bottom at 1.1845. Weekly MACD is in sell zone, implying important top at 1.2350.

GBP/USD: The pair is above major moving averages. Daily MACD  is in sell zone, implying important top at 1.4240 and weekly MACD is  in buy zone, implying important bottom at 1.2675. Important support is at 1.3760/1.3565 . Important resistances are at 1.40/1.4250.

USD/YEN: The pair is above 50 and 200 day major moving averages. Daily MACD is in buy zone, implying important bottom at 104.40. Next important resistance is at 109.40/112.20. Important support is at 108.35/106.20.

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