FX MORNING UPDATE :

USDINR opened at 74.80 on Friday and the pair traded in the 74.28-74.80 range. Spot USDINR closed at 74.35, loss of 57 ps for USD as against prior close of 74.92. RBI reference rate was fixed at 74.57 on 16/04Apr USD/INR closed at 74.55, loss of 66 ps for USD as compared to prior day’s close of 75.21. Apr Euro/INR closed at 89.34, GBP/INR at 102.70 and Yen/INR at 68.53.

Rupee recovered to 74.28 as yields spiked higher due to steep increase in WPI inflation.

PAIRS RBI REF RATE (16/04)
USDINR 74.57
EURINR 89.19
GBPINR 102.46
JPYINR 68.50

In April till date, FII’S have sold Rs 1653 Cr worth of Indian Equities and have sold Rs 2656 Cr worth of Indian debt.in 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs  42820 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.

Benchmark Nifty climbed 0.25% on Friday. DOW climbed 164 points (0.58%).Nikkei climbed 0.14% and Hang seng climbed 0.85% .

Euro closed the week at 1.1986, Pound at 1.3840, Yen at 108.81.  

Commodities: Gold is now at USD 1776 and WT1Crude at USD 63.08/Brent at USD 66.71.

Interest rates: USD 10 Yr yield is at 1.59% and 3 m libor closed at 0.19%. Indian 10 yr benchmark yield closed at 6.08%.

Economic news: Indian WPI inflation climbed steeply to 7.39% in March, up from 4.17% in Feb. 10 Year G-SEC yield spiked to 6.17%. However, it retraced back to 6.08% at close.

Data highlights: – US building permits climbed to 1.77 mn, housing starts climbed to 1.74 mn.

-EU CPI was finalized at 1.3% y/y.

Monday’s calendar: No major data release.

USD/INR     74.80 74.28
EUR/USD     1.1986 1.1996 1.1950
GBP/USD     1.3840 1.3844 1.3716
USD/JPY     108.81 108.97 108.61

Daily Support/Resistance table

currency pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1977 1.2004  1.2023    1.1958 1.1931  
GBP/USD 1.38 1.3884  1.3928    1.3756 1.3672  
USD/JPY 108.79 108.98  109.12    108.61 108.43  
USD/INR 74.47 74.67 75   74.14 73.94  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1835/1.17 1.1990/1.21 SIDE UP>1.21
GBP/USD 1.3675/1.3560 1.3920/1.4240 SIDE UP>1.40
USD/JPY 108.50/107.20/105.50 111/112.20 SIDE UP>111
USD/INR 74.20/73.85 74.95/75.35 UP SIDE<73.80
USD/CHF 0.91 0.9475 SIDE UP>0.9475

Technicals: Spot closed closed above all major moving averages. 20 day moving average is at 73.33. 50 day moving average is at 73.06.200 day moving average is at 73.78. Daily MACD is in buy zone, implying bottom at 72.30. Important support is at 74.20/73.85 and important resistance is at 74.95/75.35. Spot closed below its average level of the day.

Intraday supports and resistances for Apr contract are:

PP: 74.72, S1:74.24, S2:73.94, R1:75.02, R2: 75.50                       

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

However on directional basis, suggest the following:

Upside break of 74 has ended Rupee’s multi month upward trend. Expect 73.80-75.50 trading range till either side is broken.

Importer hedging should be done on dips to 73.80 and exports hedging can be done closer to 75.50.

Exporters can hedge EURINR exposure.

 CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day moving averages. Major resistance is at 1.20/1.21. Next major support is at 1.1845. Daily MACD is in buy zone, implying an important bottom at 1.17. Weekly MACD is in sell zone, implying important top at 1.2350.

GBP/USD: The pair is above 200 day moving average, but below 50 day average. Daily MACD is in buy zone, implying important bottom at 1.3670 and weekly MACD is in sell zone, implying important top at 1.4237. Important support is at 1.3675/1.3565.Important resistances are at 1.3920/1.40/1.4250.

USD/YEN: The pair is above 50 and 200 day major moving averages. Daily MACD is in sell zone, implying important top at 110.97. Next important resistance is at 111/112.20. Important support is at 108.35/107.50.

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