FX MORNING UPDATE :

USDINR opened at 73.03 y’day and the pair traded in the 73.02-73.12 range. Spot USDINR closed at 73.11, gain of 9 ps USD as against prior close of 73.02. RBI reference rate was fixed at 73.05 on 06/09Sep USD/INR closed at 73.23, gain of 4 ps for USD as compared to prior day’s close of 73.19. Sep Euro/INR closed at 87.23, GBP/INR at 101.37 and Yen/INR at 66.70. USDINR fwd premia was trading at around 4.30% p.a. In Sept, there are 13 IPO’S and hence USD inflows may continue to remain robust. US’D decline momentum seems abated. USDINR has to clear 73.40 to rally further to 73.70 and 73.95 levels.

PAIRS RBI REF RATE (06/09)
USDINR 73.05
EURINR 86.75
GBPINR 101.18
JPYINR 66.54

In August, FII’S have net bought Rs 4640 cr in Equity segment and have net bought Rs 12028 cr of debt. In this financial year, FII’S have net sold Rs 2375 Cr worth of Indian Equities and have bought Rs 7865 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 climbed 0.31% y’day. US market was closed y’day.Nikkei was up 1.83% and Hang seng climbed 1.01% y’day.

Euro is now at 1.1881, Pound at 1.3849, Yen at 109.77.

Commodities: Gold is now at USD 1830 and WT1Crude at USD 69/Brent at USD 72.45.

Interest rates: USD 10 Yr yield is at 1.32% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.15%.

Economic news: ECB meeting is the focus event for the week. The pace of asset purchases in the Pandemic Emergency Purchase Program (PEPP) in 4Q21 is the focus of this week’s ECB meeting. 

Data highlights: – German factory orders climbed 3.4% m/m. Sentix investor confidence survey dipped to 19.6.

-UK PMI( construction) dipped to 55.2.

Tuesday’s calendar: – EU and German zew survey

USD/INR      73.12 73.02
EUR/USD     1.1881 1.1886 1.1856
GBP/USD     1.3849 1.3860 1.3819
USD/JPY     109.77 109.94 109.75

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1872 1.1888 1.1902 1.1918  1.1858 1.1842 1.1828
GBP/USD 1.3839 1.3859 1.3880 1.39 1.3818 1.3798 1.3777
USD/JPY 109.84 109.93 110.04 110.13 109.74 109.64 109.54
USD/INR 73.08 73.14 73.18   73.04 72.98

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1665 1.1910/1.20 DN UP>1.20
GBP/USD 1.3770/1.3670/1.36 1.40 SIDE DN<1.3650
USD/JPY 109.10/108.75 110.80/111.60 UP DN<108.70
USD/INR 72.75 73.40/73.70 DN UP>74.10
USD/CHF 0.91/0.9010 0.9240 UP DN<0.91

Technicals: Spot closed below 20, 50 and 100 day major moving averages. 20 day moving average is at 73.90. 50 day moving average is at 74.22.200 day moving average is at 73.62. Daily MACD is in sell zone, implying top at 74.95. Important resistance is at 73.35/73.55 and important support is at 72.75. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 73.20, S1:73.13, S2:73.03, R1:73.30, R2:73.37              

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 73.70/74.10.

Exporters can hedge EURINR receivables exposure at 87.25.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day moving averages, but above 50 day moving average. Major resistance is at 1.1910/1.20. Next major support is at 1.1665. Daily MACD is in buy zone, implying an important bottom at 1.1665. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is above 50 and 200 day moving averages, but below 100 day moving average. Daily MACD is in buy zone, implying important bottom at 1.36 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.36.Important resistance is at 1.40.

USD/YEN: The pair is between major moving averages. Daily MACD is in buy zone, implying important bottom at 109.10. Next important resistance is at 110.80/111.60. Important support is at 109.10/108.70.

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