27/07/2018

USDINR opened at 68.70 y’day and the pair traded in the 68.75-68.61 range. Spot USDINR closed at 68.66, loss of 12 ps for USD as against prior close of 68.78.RBI reference rate was fixed at 68.80. July USD/INR closed at 68.64, loss of 19 ps for USD as compared to prior day’s close of 68.83. July Euro/INR closed at 80.41, GBP/INR at 90.45 and Yen/INR at 61.935.

FII’S have sold Rs 2788 Cr of Indian Equities in July till date . FII’S have sold Rs 1934 Cr of Indian debt securities in June till date . On a cumulative basis, FII’S have sold Rupees 1249 Cr of Indian Equities till date for this calendar year and have sold  Rupees 43252 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.32% Y’day. DOW climbed 112 points (0.44%) y’day. Nikkei declined 0.12% and Hang seng declined 0.48% y’day.

Euro is now at 1.1650, Pound at 1.3106,Yen at 110.98      

Commodities: Gold is now at USD 1222 and WT1Crude at USD 69.56.

Interest rates: USD 10 Yr yield is at 2.97% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.76%.   

Economic news: US President Donald Trump and European Commission President agreed to suspend new tariffs while negotiating over trade, pulling the U.S. and Europe back from the edge of a transatlantic trade war.

The leaders pledged to expand European imports of U.S. liquefied natural gas and soybeans and both vowed to lower industrial tariffs, excluding autos. The U.S. and European Union will “hold off on other tariffs”’ while negotiations proceed, as well as re-examine U.S. steel and aluminium tariffs and retaliatory duties imposed by the EU “in due course,” EU President was quoted.                                                                                                                     

ECB left interest rates unchanged as widely expected. Main refinancing rate is held at 0.00%, marginal lending facility rate at 0.25%, deposit facility rate at -0.40%. In the introductory statement to the press conference, ECB President Mario Draghi reiterated that the asset purchase target will be lowered to EUR 10B per month after September, subject to data confirmation to economic forecasts. The program will end after December. Interest rates are expected state at present levels through the summer of 2019.

Draghi also said latest stabilization in economic data is in line with forecasts and points to ongoing growth. Risk to growth outlook remains broadly balanced despite prominent threat of protectionism. Meanwhile, underlying inflation remains muted for now but is expected to rise gradually in medium term. And, ample degree of monetary policy stimulus is still needed at present.

Euro turned weaker after ECB meeting.

Chinese President told BRICS leaders that it is imperative to safeguard the rule-based multilateral trading regime; promote trade and investment, globalization and facilitation; and reject protectionism outright.”

Data Highlights : – US weekly jobless claims rose modestly to 217k and durables order climbed 1%, below consensus of 2.5%.

Friday’s calendar: US GDP (advance)                                                                      

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 68.75. 50 day moving average is at 68.16. 200 day moving average is at 65.65. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 68.30 and later at 67.70. Important resistance is at 69.10. Spot closed below its average level of the day.  

Intra day supports and resistances for July contract are:

PP: 68.69,S1:68.55, S2:68.47, R1:68.78, R2:68.91.                                                              

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

 CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day major moving averages. Next Major resistance is at 1.1850 and later at 1.1960. Major support is at 1.1508. Daily MACD is in buy zone, implying an important bottom at 1.1508. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in sell zone, implying important top at 1.3365 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.3365 and later at 1.3475/1.3650. Important support is at 1.2770.    

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.35. Next important support is at 110.85. Important resistance is  113.20.