FX MORNING UPDATE :

USDINR opened at 74.46 y’day and the pair traded in the 74.41-74.52 range. Spot USDINR closed at 74.42, gain of 1 ps for USD as against prior close of 74.41. RBI reference rate was fixed at 74.45 on 26/07July USD/INR closed at 74.45, loss of 2 ps for USD as compared to prior day’s close of 74.47. July Euro/INR closed at 87.84, GBP/INR at 102.65 and Yen/INR at 67.53. USDINR fwd premia was trading at around 4.48% p.a.

PAIRS RBI REF RATE (26/07)
USDINR 74.45
EURINR 87.70
GBPINR 102.34
JPYINR 67.51

In July, FII’S have net sold Rs 4569 cr in Equity segment and have net sold Rs 1143 cr of debt. In this financial year, FII’S have net bought Rs 4482 Cr worth of Indian Equities and have sold Rs 5278 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 0.20% y’day. DOW climbed 82 points (0.24%).Nikkei climbed 1.04% and Hang seng declined 3.90%.

Euro is now at 1.1807, Pound at 1.3824, Yen at 110.25. 

Commodities: Gold is now at USD 1798 and WT1Crude at USD 71.98/Brent at USD 73.80.

Interest rates: USD 10 Yr yield is at 1.28% and 3 m libor closed at 0.13%. Indian 10 yr benchmark yield closed at 6.16%.

Economic news:  Fed meeting, US GDP data, US tech companies’ earnings and Core PCE index are the focus events for the upcoming week. Germany Ifo Business Climate dropped to 100.8 pts in July, down slightly from 101.7, below expectation of 102.1. Japanese PMI Manufacturing dropped slightly from 52.4 to 52.2 in July, below expectation of 53.1. PMI Services dropped from 48.0 to 46.4. PMI Composite dropped from 48.9 to 47.7.

Data highlights: – US new home sales declined to 676k.

Tuesday’s calendar: – US Durables order, S&P House price index and consumer confidence.

USD/INR      74.52 74.41
EUR/USD     1.1807 1.1818 1.1763
GBP/USD     1.3824 1.3834 1.3737
USD/JPY     110.25 110.58 110.13

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1795 1.1827 1.1849 1.1881 1.1772 1.1741 1.1718
GBP/USD 1.3799 1.3861 1.3895 1.3957 1.3764 1.3703 1.3668
USD/JPY 110.34 110.56 110.80 111.01 110.10 109.88 109.64
USD/INR 74.45 74.49 74.56   74.38 74.34  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1705 1.1810/1.1975 DN UP>1.2050
GBP/USD 1.3570/1.3430 1.39 DN UP>1.39
USD/JPY 109 111.65 UP DN<109
USD/INR 74.40/74.25 75 UP DN<74.40
USD/CHF 0.9130 0.9275 UP DN<0.9130

Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.52. 50 day moving average is at 73.76.200 day moving average is at 73.56. 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: 74.46, S1:74.37, S2:74.30, R1:74.54, R2:74.62                   

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 . USD exports can be hedged.

Exporters can hedge EURINR receivables exposure at 88.30.

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 1.17. Daily MACD is in buy zone, implying an important bottom at 1.17. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is below major 50, 100 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.39 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3570/1.3450.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 111.50. Important support is at 109.

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