FX MORNING UPDATE 

                                                                                    

USDINR opened at 72.95 y’day and the pair traded in the 72.94-73.12 range. Spot USDINR closed at 73.06, gain of 8 ps for USD as against prior close of 72.98. RBI reference rate was fixed at 72.99 on 10/06June USD/INR closed at 73.20, gain of 11 ps for USD as compared to prior day’s close of 73.09. June Euro/INR closed at 89.15, GBP/INR at 103.19 and Yen/INR at 66.86. USDINR fwd premia was trading at around 4.50% p.a.

PAIRS RBI REF RATE (09/06)
USDINR 72.99
EURINR 88.84
GBPINR 103.03
JPYINR 66.68

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 climbed 0.65% y’day. DOW climbed 19 points (0.06%).Nikkei climbed 0.34% and Hang seng declined 0.13%.

Euro is now at 1.2181, Pound at 1.4175, Yen at 109.40  

Commodities: Gold is now at USD 1902 and WT1Crude at USD 70.10/Brent at USD 72.32.

Interest rates: USD 10 Yr yield is at 1.44% and 3 m libor closed at 0.155%. Indian 10 yr benchmark yield closed at 6.01%.

Economic news: US CPI jumped 5% y/y in May as against 4.2% in April. On m/m, CPI climbed 0.6%. Core CPI, all items less food and energy, rose 0.7% mom, versus expectation of 0.4% mom.

ECB maintained status quo and signaled it was too early to taper its bond purchases, saying that it expects an accelerated pace of purchases to continue during Q3. ECB now forecasts Eurozone GDP growth of 4.6% in 2021 (compared to 4.0% in March) and 4.7% in 2022 (4.1% in March). For inflation, the ECB expects the CPI to rise 1.9% in 2021 (compared to 1.5% in March) and by 1.5% in 2022 (1.2% in March). 

Indian IIP and CPI data due for release.

Data highlights: – US Weekly jobless claims declined to 376k.

Friday’s calendar: – UK GDP, Industrial and manufacturing production.

USD/INR     73.12 72.94
EUR/USD     1.2182 1.2195 1.2144
GBP/USD     1.4177 1.4179 1.4044
USD/JPY     109.38 109.79 109.31

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.2170 1.2196 1.2221 1.2247 1.2145 1.2119 1.2094
GBP/USD 1.4141 1.4208 1.4246 1.4312 1.4103 1.4036 1.3999
USD/JPY 109.50 109.69 109.99 110.18 109.21 109.01 108.72
USD/INR 73.04 73.14 73.20   72.96 72.88

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.2050/1.1990 1.2265 SIDE UP>1.2265
GBP/USD 1.40/1.38 1.4240 UP SIDE<1.40
USD/JPY 108.35/107.47 110.30 UP DN<108.55
USD/INR 72.25 73.30 DN UP>73.30
USD/CHF 0.8930/0.8870 0.9050/0.9130 DN UP>0.9130

Technicals: Spot closed below 50 and 200 day major moving averages. 20 day moving average is at 72.95. 50 day moving average is at 73.55.200 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 above its average level of the day.

Intraday supports and resistances for June contract are:

PP: 73.17, S1:73.08, S2:72.97, R1:73.28, R2:73.37                      

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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