FX MORNING UPDATE :

USDINR opened at 74.38 on Friday and the pair traded in the 74.36-74.48 range. Spot USDINR closed at 74.39, gain of 14 ps USD as against prior close of 74.25. RBI reference rate was fixed at 74.31 on 18/08Aug USD/INR closed at 74.41, gain of 8 ps for USD as compared to prior day’s close of 74.33. Aug Euro/INR closed at 86.93, GBP/INR at 101.35 and Yen/INR at 67.85. USDINR fwd premia was trading at around 4.25% p.a.

PAIRS RBI REF RATE (20/08)
USDINR 74.31
EURINR 87.09
GBPINR 102.14
JPYINR 67.79

In August, till date,, FII’S have net bought Rs 7558 cr in Equity segment and have net bought Rs 646 cr of debt. In this financial year, FII’S have net bought Rs 543 Cr worth of Indian Equities and have sold Rs 4163 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 0.71% on Friday. DOW climbed 225 points (0.65%).Nikkei was down 0.98% and Hang seng declined 1.84% on Friday.

Euro closed the week at 1.1695, Pound at 1.3621, Yen at 109.79.

Commodities: Gold is now at USD 1782 and WT1Crude at USD 61.86/Brent at USD 65.

Interest rates: USD 10 Yr yield is at 1.255% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.23%.

Economic news: Global Equity markets stabilized after early fall on Friday. However, commodity prices led by Crude oil continued to decline. USD remained strong against majors.

Fed Chief will be speaking at Jackson hole symposium and he may offer further insights into Fed’s thinking on QE taper. US Personal income, spending and Core PCE index are other key data releases for the week. ECB will also be releasing policy minutes.

Data highlights: – UK retail sales declined -2.5% m/m.

Monday’s calendar: – US existing home sales

-EU PMI(mfrg-flash) and PMI(services- flash)

-UK PMI(mfrg)

USD/INR      74.48 74.36
EUR/USD     1.1695 1.1705 1.1664
GBP/USD     1.3621 1.3649 1.3601
USD/JPY     109.79 110.23 109.49

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1688 1.1712  1.1729    1.1671 1.1647
GBP/USD 1.3623  1.3646  1.3671   1.3597 1.3575  
USD/JPY 109.83  110.18  110.57   109.43 109.09  
USD/INR 74.41 74.46 74.53   74.34 74.29  

 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.16/1.1495 1.1770/1.1845 DN UP>1.1900
GBP/USD 1.3570 1.3750/1.40 UP DN<1.3790
USD/JPY 109.10/108.75 110.80/111.60 UP DN<108.70
USD/INR 74.08/73.90 74.50 UP SIDE<74.24
USD/CHF 0.91/0.9010 0.9240 UP DN<0.9010

Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.33. 50 day moving average is at 74.23.200 day moving average is at 73.64. Daily MACD is in buy zone, implying bottom at 74.08. Important support is at 74.08 and important resistance is at 74.50. Spot closed below its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 74.45, S1:74.37, S2:74.32, R1:74.49, R2:74.58                 

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR Imports hedging can be done . USD exports can be hedged on rally to 74.60.

Exporters can hedge EURINR receivables exposure at 87.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50 and 200 day moving averages. Major resistance is at 1.19. Next major support is at 1.16. Daily MACD is in sell zone, implying an important top at 1.19. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is below 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.3985 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3570.Important resistance is at 1.40.

USD/YEN: The pair is between major moving averages. Daily MACD is in sell zone, implying important top at 110.80. Next important resistance is at 110.80/111.60. Important support is at 108.70.

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