FX MORNING UPDATE :

USDINR opened at 74.32 on Friday and the pair traded in the 74.27-74.44 range. Spot USDINR closed at 74.41, gain of 13 ps for USD as against prior close of 74.28. RBI reference rate was fixed at 74.38 on 30/07Aug USD/INR closed at 74.58, gain of 9 ps for USD as compared to prior day’s close of 74.49. Aug Euro/INR closed at 88.77, GBP/INR at 104.14 and Yen/INR at 68.03. USDINR fwd premia was trading at around 4.38% p.a.

PAIRS RBI REF RATE (30/07)
USDINR 74.38
EURINR 88.39
GBPINR 103.73
JPYINR 67.89

In July, FII’S have net sold Rs 10188 cr in Equity segment and have net sold Rs 758 cr of debt. In this financial year, FII’S have net sold Rs 1137 Cr worth of Indian Equities and have sold Rs 4893 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 0.15% on Friday. DOW declined 149 points (0.42%).Nikkei was down 1.80%  and Hang seng declined 1.28% on Friday.

Euro closed the week at 1.1871, Pound at 1.3902, Yen at 109.72. 

Commodities: Gold is now at USD 1812 and WT1Crude at USD 73.72/Brent at USD 75.14.

Interest rates: USD 10 Yr yield is at 1.253% and 3 m libor closed at 0.13%. Indian 10 yr benchmark yield closed at 6.20%.

Economic news: Eurozone GDP grew 2.0% qoq in Q2, well above expectation of 1.5% qoq. German GDP grew 1.5% qoq in Q2, below expectation of 2.0% qoq. US income, spending data beat consensus.

Data highlights: – US Personal income rose 0.1% m/m, spending climbed 1% m/m, Core PCE index rose 0.4% m/m, below consensus.

-EU CPI climbed 2.2% y/y.

Monday’s calendar: – US ISM(mfrg) and construction spending

-German retail sales, PMI(mfrg)

-UK PMI(mfrg)

USD/INR      74.44 74.27
EUR/USD     1.1871 1.1910 1.1852
GBP/USD     1.3902 1.3984 1.3888
USD/JPY     109.72 109.83 109.36

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1877 1.1903 1.1935   1.1844 1.1819  
GBP/USD 1.3924 1.3961  1.4020    1.3864 1.4020  
USD/JPY 109.63 109.91  110.10    109.43 109.16  
USD/INR 74.38 74.48 74.55   74.32 74.21  

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1755 1.1975 DN UP>1.2050
GBP/USD 1.3730/1.3570 1.40 UP DN<1.3730
USD/JPY 109 110.60 SIDE DN<109
USD/INR 74.24/74.05/73.90 74.56/74.95 DN UP>74.56
USD/CHF 0.8925 0.9130 DN UP>0.9180

Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.54. 50 day moving average is at 73.86.200 day moving average is at 73.58. Daily MACD is in sell zone, implying top at 74.95. Important support is at 74.24/73.90 and important resistance is at 74.57/74.90. Spot closed above its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 74.54, S1:74.43, S2:74.30, R1:74.68, R2:74.78                  

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 50 and 200 day moving averages. Major resistance is at 1.1975. Next major support is at 1.1815/1.1755. Daily MACD is in buy zone, implying an important bottom at 1.1755. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is above 200 day moving average. Daily MACD is in buy zone, implying important bottom at 1.3570 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3740/1.3570.Important resistance is at 1.4010.

USD/YEN: The pair is above 200 day major moving average. Daily MACD is in sell zone, implying important top at 110.60. Next important resistance is at 110.60/111.60. Important support is at 109.

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