17/07/2018                                                                       

USDINR opened at 68.56 y’day and the pair traded in the 68.52-68.71 range. Spot USDINR closed at 68.57, gain of 4 ps for USD as against prior close of 68.53.RBI reference rate was fixed at 68.58.July USD/INR closed at 68.66, gain of 2 ps for USD as compared to prior day’s close of 68.66. July Euro/INR closed at 80.58, GBP/INR at 91.22 and Yen/INR at 61.19.

FII’S have sold Rs 1377 Cr of Indian Equities in July till date . FII’S have sold Rs 1951 Cr of Indian debt securities in June till date . On a cumulative basis, FII’S have bought Rupees 160 Cr of Indian Equities till date for this calendar year and have sold  Rupees 43269 Cr of Indian debt in this calendar year till date.

Benchmark Nifty declined 0.74% y’day. DOW climbed 94 points (0.38%) on Friday.Nikkei climbed 1.85%  and Hang seng closed flat.

Euro closed the week at 1.1706, Pound at 1.3235,Yen at 112.44.

Commodities: Gold is now at USD 1239 and WT1Crude at USD 67.21.

Interest rates: USD 10 Yr yield is at 2.83% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.87%.        

Economic news: IMF  retained global growth of around 3.9% for 2018 and 2019. But “risk of worse outcomes has increased, even for the near term.” In particular, it noted that “risk that current trade tensions escalate further—with adverse effects on confidence, asset prices, and investment—is the greatest near-term threat to global growth.”

It added that the US has ” initiated trade actions affecting a broad group of countries” and “faces retaliation or retaliatory threats from China, the European Union, its NAFTA partners, and Japan, among others.” Based on their modeling, IMF official said the trade policy threats could lower global output by around 0.5% by 2020. The US is “especially” vulnerable as it’s the “focus of global retaliation”.                                                                   

IMF projects Indian GDP to grow by 7.3% this year and 7.5% next year.

Crude prices declined steeply as supply tensions eased with Libyan ports opening and increased optimism that Russia will augment supplies further.

Data Highlights : – US retail sales climbed 0.5% m/m and NY mfrg index climbed to 22.6, better than consensus.

Tuesday’s calendar: – US industrial production and TIC purchases

-UK unemployment rate and claimant count change.

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 68.52. 50 day moving average is at 67.96. 200 day moving average is at 65.55. Daily MACD is in sell zone, implying top at 69.09 . Important support zone is at 68.30 and later at 67.70. Important resistance is at 69.10. Spot closed below its average level of the day.  

Intra day supports and resistances for July contract are:

PP: 68.68,S1:68.55, S2:68.44, R1:68.79, R2:68.92.                                                              

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 1.3365 and later at 1.3475/1.3650. 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 111.40/110.85. Important resistance is  113.70.