FX MORNING UPDATE :

USDINR opened at 74.21 y’day and the pair traded in the 74.16-74.26 range. Spot USDINR closed at 74.16, loss of 12 ps for USD as against prior close of 74.28. RBI reference rate was fixed at 74.22 on 24/06June USD/INR closed at 74.20, loss of 12 ps for USD as compared to prior day’s close of 74.32. June Euro/INR closed at 88.58, GBP/INR at 103.33 and Yen/INR at 66.98. USDINR fwd premia was trading at around 4.32% p.a.

PAIRS RBI REF RATE (24/06)
USDINR 74.225
EURINR 88.57
GBPINR 103.66
JPYINR 66.97

In June till date, FII’S have net bought Rs 5848 cr in Equity segment and have net sold Rs 2293 cr of debt. In this financial year, FII’S have net bought Rs 6297 Cr worth of Indian Equities and have sold Rs 2289 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 0.66% y’day. DOW climbed 322 points (0.95%).Nikkei closed flat and Hang seng climbed 0.25%.

Euro is now at 1.1940, Pound at 1.3925, Yen at 110.90. 

Commodities: Gold is now at USD 1776 and WT1Crude at USD 73.60/Brent at USD 75.90.

Interest rates: USD 10 Yr yield is at 1.499% and 3 m libor closed at 0.135%. Indian 10 yr benchmark yield closed at 6.03%.

Economic news:  BoE left Bank Rate unchanged at 0.10% by unanimous vote. BoE said that the “existing stance of monetary policy remained appropriate” to meet the 2% inflation target and to sustain growth and employment.Bank staff have “revised up” Q2 GDP growth expectation by 1.50% since the May MPR, as restrictions on economic activity have eased. CPI inflation is expected to “pick up further above the target” and is “likely to exceed 3% for a temporary period”. 

Data highlights: – US Weekly jobless claims declined to 411k, durables order climbed 2.3% m/m.

-German Ifo climbed to 101.8.

Friday’s calendar: – US Personal income, spending and Core PCE index

USD/INR     74.26 74.16
EUR/USD     1.1940 1.1956 1.1918
GBP/USD     1.3925 1.3987 1.3890
USD/JPY     110.90 111.11 110.71

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1934 1.1950 1.1972 1.1988 1.1912 1.1896 1.1873
GBP/USD 1.3931 1.3972 1.4028 1.4069 1.3875 1.3834 1.3778
USD/JPY 110.91 111.11 111.32 111.52 110.71 110.50 110.30
USD/INR 74.19 74.22 74.29   74.12 74.09  

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.2050/1.1990 1.1990/1.2050 DN UP>1.2090
GBP/USD 1.3670 1.40/1.4090 DN UP>1.4070
USD/JPY 109.30/108.35 110.30 UP DN<108.35
USD/INR 73.80/73.55 74.60 UP DN<73.30
USD/CHF 0.9150/0.91 0.9475 UP DN<0.91

Technicals: Spot closed above all major moving averages. 20 day moving average is at 73.22. 50 day moving average is at 73.66.200 day moving average is at 73.46. Daily MACD is in buy zone, implying bottom at 72.35. Important support is at 73.80/73.55 and important resistance is at 74.60. Spot closed below its average level of the day.

Intraday supports and resistances for June contract are:

PP: 74.21, S1:74.12, S2:74.06, R1:74.28, R2:74.36                      

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

However on directional basis, suggest the following:

USDINR Imports hedging should be done on dips and exports hedging can be deferred tii 74.70.

Importers can hedge EURINR receivables exposure at 88.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below all moving averages. Major resistance is at 1.1990/1.2050. Next major support is at 1.17. Daily MACD is in sell zone, implying an important top at 1.2270. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 1.4240 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3670.Important resistances is at 1.40/1.4090.

USD/YEN: The pair is above 200 day major moving average. Daily MACD is in buy zone, implying important bottom at 109.35. Next important resistance is at 110.85. Important support is at 109.35/108.35.

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