FX MORNING UPDATE

                                                                                     

USDINR opened at 74.60 y’day and the pair traded in the 74.58-74.79 range. Spot USDINR closed at 74.62, gain of 7 ps for USD as against prior close of 74.55. RBI reference rate was fixed at 74.75 on 07/07July USD/INR closed at 74.83, gain of 15 ps for USD as compared to prior day’s close of 74.68. July Euro/INR closed at 88.50, GBP/INR at 103.41 and Yen/INR at 67.62. USDINR fwd premia was trading at around 4.45% p.a.

PAIRS RBI REF RATE (07/07)
USDINR 74.75
EURINR 88.42
GBPINR 103.27
JPYINR 67.53

In June, FII’S have net bought Rs 10251 cr in Equity segment and have net sold Rs 4487 cr of debt. In this financial year, FII’S have net bought Rs 9051 Cr worth of Indian Equities and have sold Rs 4125 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 0.39% y’day. DOW climbed 104 points (0.30%).Nikkei declined 0.96% and Hang seng declined 0.68%.

Euro is now at 1.1791, Pound at 1.3796, Yen at 110.56. 

Commodities: Gold is now at USD 1797 and WT1Crude at USD 73.40/Brent at USD 74.60.

Interest rates: USD 10 Yr yield is at 1.31% and 3 m libor closed at 0.135%. Indian 10 yr benchmark yield closed at 6.17%.

Economic news:  In a note to G-20 Ministers and Central bank Governors, IMF said that “global growth has progressed broadly in line with projections, with clear signs of divergence.”. It urged “immediate action” by G20 to “arrest the rising human and economic toll of the pandemic”. Additionally, IMF said policy support should be “tailored to the stage of the crisis, avoiding abrupt transitions.” Monetary policy should “remain accommodative in most economies”. In particular, where “inflation expectations are anchored,” continued monetary accommodation is warranted”.

FOMC minutes mentioned that :”various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had anticipated at previous meetings.”

Data highlights: – No major data release.

Thursday’s calendar: – US Weekly jobless claims

USD/INR     74.79 74.58
EUR/USD     1.1791 1.1836 1.1782
GBP/USD     1.3796 1.3842 1.3755
USD/JPY     110.56 110.82 110.39

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1804 1.1826 1.1857 1.1879 1.1772 1.1751 1.1719
GBP/USD 1.3799 1.3843 1.3886 1.3930 1.3756 1.3712 1.3670
USD/JPY 110.62 110.85 111.04 111.27 110.42 110.20 110
USD/INR 74.66 74.74 74.87   74.53 74.45  

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1810 1.1975/1.2050 DN UP>1.1975
GBP/USD 1.3730 1.40/1.4090 DN UP>1.4010
USD/JPY 110.40/109.70 111.70/112.25 UP DN<108.35
USD/INR 74.30/73.80 75 UP DN<73.80
USD/CHF 0.9050 0.9250/0.9475 UP DN<0.9050

Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.03. 50 day moving average is at 73.58.200 day moving average is at 73.48. Daily MACD is in buy zone, implying bottom at 72.35. Important support is at 74.20/73.80 and important resistance is at 74.90. Spot closed below its average level of the day.

Intraday supports and resistances for July contract are:

PP: 74.85, S1:74.74, S2:74.65, R1:74.94, R2:75.05                    

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 to 73.90 .

Exporters can hedge EURINR receivables exposure at 89/89.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below all moving averages. Major resistance is at 1.1975/1.2050. Next major support is at 1.1810/1.17. 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 50 and 100 day moving averages, but above 200 day average. 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 1.3730.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 111.70/112.25. Important support is at 110.40/109.70.

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