FX MORNING UPDATE :

USDINR opened at 74.95 on Tuesday and the pair traded in the 74.54-74.95 range. Spot USDINR closed at 74.61, loss of 26 ps for USD as against prior close of 74.87. RBI reference rate was fixed at 74.85 on 20/07July USD/INR closed at 74.71, loss of 31 ps for USD as compared to prior day’s close of 75.02. July Euro/INR closed at 88.03, GBP/INR at 101.78 and Yen/INR at 68.19. USDINR fwd premia was trading at around 4.45% p.a. FX and Equity markets were closed y’day.

PAIRS RBI REF RATE (20/07)
USDINR 74.85
EURINR 88.20
GBPINR 102.23
JPYINR 68.36

In July, FII’S have net sold Rs 3394 cr in Equity segment and have net bought Rs 605 cr of debt. In this financial year, FII’S have net bought Rs 5657 Cr worth of Indian Equities and have sold Rs 3530 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 declined 0.76% on Tuesday. DOW climbed 286 points (0.83%).Nikkei declined 1.25% and Hang seng declined 2.23%.

Euro is now at 1.1788, Pound at 1.3697, Yen at 110.12. 

Commodities: Gold is now at USD 1801 and WT1Crude at USD 70.20/Brent at USD 72.10.

Interest rates: USD 10 Yr yield is at 1.288% and 3 m libor closed at 0.13%. Indian 10 yr benchmark yield closed at 6.13%.

Economic news:  ECB meeting is the focus event for the day.

Data highlights: – US building permits dipped to 1.6 mn and housing starts climbed to 1.64 mn.

Thursday’s calendar: – US Weekly jobless claims and existing home sales

USD/INR      74.95 74.54
EUR/USD     1.1788 1.1805 1.1752
GBP/USD     1.3697 1.3723 1.3591
USD/JPY     110.12 110.39 109.81

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1783 1.1814 1.1836 1.1868 1.1761 1.1730 1.1707
GBP/USD 1.3675 1.3759 1.3807 1.3892 1.3627 1.3543 1.3494
USD/JPY 110.15 110.49 110.73 111.08 109.91 109.57 109.33
USD/INR 74.70 74.86 75.11   74.45 74.29  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1780 1.1880/1.1975 DN UP>1.2050
GBP/USD 1.3730 1.39/1.40 DN UP>1.4010
USD/JPY 109.50/108.30/107.50 110.65/111.65 UP DN<107.50
USD/INR 74.40/74.25 75 UP DN<74.40
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 74.49. 50 day moving average is at 73.70.200 day moving average is at 73.54. Daily MACD is in sell zone, implying top at 74.95. Important support is at 74.40/74.24 and important resistance is at 74.67/74.90. Spot closed below its average level of the day.

Intraday supports and resistances for July contract are:

PP: 74.78, S1:74.53, S2:74.36, R1:74.95, R2:75.20                    

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 1.1880/1.1975. Next major support is at 1.1780/1.17. 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 1.39/1.4010.

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 110.50/111.50. Important support is at 109.50/108.50.

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