FX MORNING UPDATE

USDINR opened at 72.53 Y’day and the pair traded in the 72.50-72.70 range. Spot USDINR closed at 72.56 , gain of 13 ps for USD as against prior close of 72.43. RBI reference rate was fixed at 72.29 on 23/03Mar USD/INR closed at 72.68, gain of 14 ps for USD as compared to prior day’s close of 72.54. Mar Euro/INR closed at 86.08, GBP/INR at 99.75 and Yen/INR at 66.92.

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 declined 1.79% y’day. DOW closed flat y’day(0.94%).Nikkei declined 2.04% and Hang seng declined 2.03% .

Euro is now at 1.1814,Pound at 1.3689,Yen at 108.94.      

Commodities: Gold is now at USD 1733 and WT1Crude at USD 60/Brent at USD 63.50.

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 72.70, tracking USD gains against majors and EM Currencies. Fwd premia continued to harden. Indian Equity indices fell 1.79%. Strong PMI data saved markets from steep fall. Germany PMI Manufacturing surged to 66.6 in March, up from 60.7, well above expectation of 60.9. That’s also a record high since April 1996. PMI Services rose to 50.8, up from 45.7. Surge in manufacturing activity is stronger than expected though worries remain on supply side issues, rising commodity prices and new infection curve.

Data highlights: – US durables order declined -1.1% m/m.

-EU PMI(mfrg-flash) climbed to 62.4 and PMI(services-flash) climbed to 48.8.

-UK PPI(output) climbed 0.6% m/m, RPI climbed 1.4% y/y , CPI climbed 0.4% y/y and PMI(mfrg-flash) climbed to 57.9.

Thursday’s calendar: – US weekly jobless claims

USD/INR   72.70 72.50
EUR/USD 1.1814 1.1851 1.1809
GBP/USD 1.3689 1.3743 1.3674
USD/JPY 108.94 108.96 108.46

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1824 1.1839 1.1866 1.1881 1.1797 1.1782 1.1755
GBP/USD 1.3702 1.3730 1.3771 1.3798 1.3661 1.3633 1.3592
USD/JPY 108.73

 

109 109.23 109.50 108.50 108.23

 

108

 

USD/INR 72.58 72.67 72.79   72.46 72.37  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency 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 72.90/73.25 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 72.87.200 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 72.85/73.05/73.20 . Spot closed below its average level of the day.

Intra day supports and resistances for Mar contract are:

PP:72.69,S1:72.58, S2:72.49, R1:72.78, R2: 72.89                       

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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