USDINR opened at 73.03 y’day and the pair traded in the 72.93-73.18 range. Spot USDINR closed at 73.17, gain of 13 ps for USD as against prior close of 73.04. RBI reference rate was fixed at 72.95 on 19/05. May USD/INR closed at 73.25, gain of 7 ps for USD as compared to prior day’s close of 73.18. May Euro/INR closed at 89.37, GBP/INR at 103.65 and Yen/INR at 67.05. USDINR fwd premia climbed with 1 year inching higher to 5.25% p.a.

In May till date, FII’S have net sold Rs 8713 cr in Equity segment and have net bought Rs 1756 cr of debt. In this financial year, FII’S have net bought Rs 802 Cr worth of Indian Equities and have bought Rs 655 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.

Benchmark Nifty declined 0.52%. DOW declined 164 points (0.48%).Nikkei declined 1.28% and Hang seng climbed 1.42%.

Euro is now at 1.2174, Pound at 1.4107, Yen at 109.18.  

Commodities: Gold is now at USD 1867 and WT1Crude at USD 63.34/Brent at USD 66.70.

Interest rates: USD 10 Yr yield is at 1.67% and 3 m libor closed at 0.155%. Indian 10 yr benchmark yield closed at 5.97%.

Economic news: Global stocks fell as yields climbed higher on inflation fears. UK and EU CPI climbed steeply. Japanese economy contracted at a 5.1% annual rate in the first quarter of this year. Fed minutes showed that Fed is cautious about economic recovery and expects discussion on QE tapering in one of the upcoming meetings.

Data highlights: -EU CPI was finalized at 1.6% y/y.

-UK CPI climbed 1.3% y/y, RPI climbed 2.9% y/y and PPI(output) climbed 0.4% m/m.

Thursday’s calendar: – US weekly jobless claims and Phily Fed mfrg index

Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 50 and 200 day major moving averages. 20 day moving average is at 73.92. 50 day moving average is at 73.54.200 day moving average is at 73.68. Daily MACD is in sell zone, implying top at 75.30. Important support is at 72.75 and important resistance is at 73.55/73.80. Spot closed above its average level of the day.

Intraday supports and resistances for May contract are:

PP: 73.19, S1:73.09, S2:72.93, R1:73.35, R2: 73.45                       

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

However on directional basis, suggest the following:

Expect 72.75-73.55 trading range till either side is broken.

Imports hedging should be done on dips and exports hedging can be done later on rally.

Importers can hedge EURINR exposure now at around 88.80.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day moving averages. Major resistance is at 1.2250/1.2330. Next major support is at 1.1990. Daily MACD is in buy zone, implying an important bottom at 1.1990. Weekly MACD is in buy zone, implying important bottom at 1.17.

GBP/USD: The pair is above 200 day moving average. Daily MACD is in buy zone, implying important bottom at 1.38 and weekly MACD is in sell zone, implying important top at 1.4237. Important support is at 1.38/1.3670.Important resistances is at 1.4250.

USD/YEN: The pair is above 200 day major moving average. Daily MACD is in buy zone, implying important bottom at 107.47. Next important resistance is at 109.70/111. Important support is at 107.47.

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