FX MORNING UPDATE

USDINR opened at 73.16 y’day and the pair traded in the 73.09-73.18 range. Spot USDINR closed at 73.10, loss of 7 ps for USD as against prior close of 73.17. RBI reference rate was fixed at 73.10 on 20/05May USD/INR closed at 73.17, loss of 8 ps for USD as compared to prior day’s close of 73.25. May Euro/INR closed at 89.28, GBP/INR at 103.40 and Yen/INR at 67.18. USDINR fwd premia climbed with 1 year inching higher to 5.25% p.a.

PAIRS RBI REF RATE (20/05)
USDINR 73.10
EURINR 89.13
GBPINR 103.27
JPYINR 67.01

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 0.83%. DOW climbed 188 points (0.55%).Nikkei climbed 0.19% and Hang seng declined 0.69%.

Euro is now at 1.2234, Pound at 1.4181, Yen at 108.82.  

Commodities: Gold is now at USD 1874 and WT1Crude at USD 62.25/Brent at USD 65.30.

Interest rates: USD 10 Yr yield is at 1.64% and 3 m libor closed at 0.155%. Indian 10 yr benchmark yield closed at 5.97%.

Economic news: Rupee was range bound as crosses recovered after FOMC minutes impact.

Data highlights: – US weekly jobless claims dipped to 444k and Phily Fed mfrg index index fell sharply to 31.5.

Friday’s calendar: – US existing home sales

-EU PMI(mfrg-flash) and PMI(services-flash) and consumer confidence

-UK retail sales

USD/INR     73.18 73.09
EUR/USD     1.2234 1.2230 1.2169
GBP/USD     1.4181 1.4195 1.4102
USD/JPY     108.82 109.29 108.75

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.2208 1.2247 1.2270 1.2309 1.2186 1.2146 1.2124
GBP/USD 1.4160 1.4218 1.4253 1.4311 1.4125 1.4067 1.4033
USD/JPY 108.97 109.19 109.51 109.73 108.65 108.43 108.10
USD/INR 73.12 73.15 73.21   73.06 73.03  

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.2050/1.1990 1.2240/1.2350 UP DN<1.1990
GBP/USD 1.38/1.3670 1.4240 UP DN<1.38
USD/JPY 108.35/107.47 109.70/111 SIDE DN<107.47
USD/INR 72.75 73.55/73.80 DN SIDE>73.55
USD/CHF 0.8970 0.9160 DN UP>0.9220

Technicals: Spot closed below 50 and 200 day major moving averages. 20 day moving average is at 73.84. 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 below its average level of the day.

Intraday supports and resistances for May contract are:

PP: 73.20, S1:73.10, S2:73.05, R1:73.26, R2: 73.35                       

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.

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