USDINR opened at 73.02 on Friday and the pair traded in the 72.96-73.12 range. Spot USDINR closed at 73, gain of 10 ps for USD as against prior close of 72.90. RBI reference rate was fixed at 73.05 on 04/06. June USD/INR closed at 73.17, gain of 6 ps for USD as compared to prior day’s close of 73.11. June Euro/INR closed at 88.69, GBP/INR at 103.33 and Yen/INR at 66.48. USDINR fwd premia was trading at around 4.40% p.a. Indian FX reserves climbed to USD 598.2 bn.

In June till date, FII’S have net bought Rs 3049 cr in Equity segment and have net sold Rs 983 cr of debt. In this financial year, FII’S have net bought Rs 3498 Cr worth of Indian Equities and have sold Rs 279 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 0.13% on Friday. DOW climbed 179 points (0.52%).Nikkei declined 0.40% and Hang seng declined 0.12%.

Euro closed the week at 1.2168, Pound at 1.4160, Yen at 109.55  

Commodities: Gold is now at USD 1894 and WT1Crude at USD 69.40/Brent at USD 71.65.

Interest rates: USD 10 Yr yield is at 1.56% and 3 m libor closed at 0.155%. Indian 10 yr benchmark yield closed at 6.02%.

Economic news: RBI kept rates unchanged at 4%. GDP has been revised lower to 9.5%. Inflation is expected to be 5.1% for the full year. RBI has announced another round of G-SEC buying in Q2 to the extent of 1.2 lac cr. RBI Governor said that the central bank has actively intervened on both sides and in spot and fwds in FX market to maintain domestic objectives. FX reserves stands at USD 598.2 bn as on last Friday.

US non-farm payroll employment grew 559k in May, below expectation of 621k. Prior month’s figure was revised slightly up from 266k to 278k. Total non-farm payroll employment is down by -7.6m, or -5.0%, from its pre-pandemic level in February 2020. Unemployment rate dropped to 5.8%, down from 6.1%, slightly below expectation of 5.9%. 

Data highlights: –EU retail sales declined -3.1% m/m.

-UM PMI(construction) climbed to 64.2.

Monday’s calendar: – EU sentix investor confidence and German factory orders.

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 73.05. 50 day moving average is at 73.52.200 day moving average is at 73.54. Daily MACD is in buy zone, implying bottom at 72.35. Important support is at 72.35 and important resistance is at 73.30. Spot closed below its average level of the day.

Intraday supports and resistances for June contract are:

PP: 73.19, S1:73.08, S2:72.99, R1:73.28, R2:73.39                      

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

However on directional basis, suggest the following:

If 73.35 is broken on the upside, suggest wait for receivables hedging.

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

Importers can hedge EURINR exposure at 88.25. Receivables can be hedged at 89+

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 1.2050/1.1990. Daily MACD is in sell zone, implying an important top at 1.2250. 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 sell zone, implying important top at 1.4240 and weekly MACD is in buy zone, implying important bottom at 1.3665. Important support is at 1.40/1.38.Important resistances is at 1.4240.

USD/YEN: The pair is above 200 day major moving average. Daily MACD is in buy zone, implying important bottom at 108.35. Next important resistance is at 110.35. Important support is at 108.35.

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