FX MORNING UPDATE :

USDINR opened at 73.91 Y’day and the pair traded in the 73.77-73.97 range. Spot USDINR closed at 73.86, loss of 7 ps for USD as against prior close of 73.93. RBI reference rate was fixed at 73.84 on 04/05May USD/INR closed at 74.25, loss of 8 ps for USD as compared to prior day’s close of 74.33. May Euro/INR closed at 89.24, GBP/INR at 103.02 and Yen/INR at 67.88. Rupee gained due to IPO related inflows. Fwd premia was very volatile due to spot selling of USD from nostro accounts and fwd buying by same participants. USD liquidity due to IPO flows put pressure on cash rate discount.

PAIRS RBI REF RATE (04/05)
USDINR 73.84
EURINR 88.87
GBPINR 102.46
JPYINR 67.54

In April till date, FII’S have net bought Rs 2355 Cr worth of Indian Equities and have sold Rs 1101 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 declined 0.94%. DOW climbed 238 points (0.70%).Nikkei declined 0.83% and Hang seng climbed 0.94%.

Euro is now at 1.2020, Pound at 1.3897, Yen at 109.33.  

Commodities: Gold is now at USD 1778 and WT1Crude at USD 66.20/Brent at USD 67.45.

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 6.02%.

Economic news: Indian exports stood at USD 30.1 bn in April. Imports rose to USD 45.45 bn. Trade deficit is at USD 14.35 bn. Focus is now on US employment data.

Data highlights: – US factory orders climbed 1.1% m/m.

Wednesday’s calendar: – US ADP employment report and ISM (non mfrg)

-EU PMI(services) and PPI

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1990/1.1935 1.2150/1.2240 UP DN<1.1935
GBP/USD 1.3670 1.4010/1.4240 UP DN<1.3670
USD/JPY 107.47 109.95/111 UP DN<107.47
USD/INR 73.95/73.80 74.28/74.62/74.90 SIDE UP>74.25
USD/CHF 0.9080 0.9220/0.94 SIDE UP>0.9220

Technicals: Spot closed above 50 and 200 day major moving averages. 20 day moving average is at 74.37. 50 day moving average is at 73.35.200 day moving average is at 73.76. Daily MACD is in sell zone, implying top at 75.30. Important support is at 73.95/73.80 and important resistance is at 74.28/74.62/74.90. Spot closed at its average level of the day.

Intraday supports and resistances for May contract are:

PP: 74.31, S1:74.16, S2:74.07, R1:74.40, R2: 74.55                       

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

However on directional basis, suggest the following:

Expect 73.80-75.50 trading range till either side is broken.

Imports hedging should be done on dips to 73.80 and exports hedging can be done closer to 75.30.

Importers can hedge EURINR exposure at 88.60.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day moving averages. Major resistance is at 1.2150/1.2250. Next major support is at 1.1990 and later at 1.1935. 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. Daily MACD is in sell zone, implying important top at 1.4010 and weekly MACD is in sell zone, implying important top at 1.4237. Important support is at 1.3670/1.3565.Important resistances are at 1.4010/1.4250.

USD/YEN: The pair is above all major moving averages. Daily MACD is in buy zone, implying important bottom at 107.47. Next important resistance is at 110/111. Important support is at 107.47

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