FX MORNING UPDATE :

USDINR opened at 74.48 y’day and the pair traded in the 74.41-74.59 range. Spot USDINR closed at 74.58, loss of 5 ps for USD as against prior close of 74.63. RBI reference rate was fixed at 74.45 on 12/07July USD/INR closed at 74.75, loss of 4 ps for USD as compared to prior day’s close of 74.79. July Euro/INR closed at 88.61, GBP/INR at 103.49 and Yen/INR at 67.81.. USDINR fwd premia was trading at around 4.50% p.a.

PAIRS RBI REF RATE (12/07)
USDINR 74.45
EURINR 88.32
GBPINR 103.38
JPYINR 67.58

In July, FII’S have net sold Rs 4256 cr in Equity segment and have net bought Rs 1983 cr of debt. In this financial year, FII’S have net bought Rs 4795 Cr worth of Indian Equities and have sold Rs 2142 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 closed flat y’day. DOW climbed 126 points (0.36%).Nikkei climbed 2.25% and Hang seng climbed 0.65%.

Euro is now at 1.1873, Pound at 1.3899, Yen at 110.14. 

Commodities: Gold is now at USD 1808 and WT1Crude at USD 74.34/Brent at USD 75.50.

Interest rates: USD 10 Yr yield is at 1.37% and 3 m libor closed at 0.13%. Indian 10 yr benchmark yield closed at 6.21%.

Economic news:  Indian 10 Year G-SEC yields climbed sharply to 6.21%. Rupee’s gains was limited to 74.40. CPI climbed 6.29% in June. Food inflation inched higher to 5.15%. IIP climbed 29.3% y/y in May.

Data highlights: – No major data release.

Tuesday’s calendar: – US CPI

USD/INR      74.59 74.41
EUR/USD     1.1864 1.1880 1.1836
GBP/USD     1.3891 1.3910 1.3839
USD/JPY     110.37 110.41 109.99

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1860 1.1884 1.1904 1.1928 1.1840 1.1816 1.1796
GBP/USD 1.3879 1.3919 1.3950 1.3989 1.3848 1.3808 1.3777
USD/JPY 110.24 110.49 110.67 110.92 110.07 109.81 109.64
USD/INR 74.52 74.64 74.71   74.45 74.33  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1840/1.1780 1.1975/1.2050 DN UP>1.2050
GBP/USD 1.3730 1.40/1.4090 DN UP>1.4010
USD/JPY 109.40/108.30/107.50 111.70/112.25 UP DN<107.50
USD/INR 74.25/73.80 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 74.26. 50 day moving average is at 73.60.200 day moving average is at 73.48. Daily MACD is in buy zone, implying bottom at 72.35. Important support is at 74.24/73.80 and important resistance is at 74.90. Spot closed above its average level of the day.

Intraday supports and resistances for July contract are:

PP: 74.69, S1:74.59, S2:74.43, R1:74.85, R2:74.95                    

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 1.1840/1.17. Daily MACD is in buy zone, implying an important bottom at 1.1780. 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 buy zone, implying important bottom at 1.3730 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 sell zone, implying important top at 111.65. Next important resistance is at 111.65/112.25. Important support is at 109.40/108.50.

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