USDINR opened at 73.78 on Thursday and the pair traded in the 73.48-73.85 range. Spot USDINR closed at 73.50, loss of 10 ps USD as against prior close of 73.60. RBI reference rate was fixed at 73.69 on 09/09. Sep USD/INR closed at 73.68, unchanged for USD as compared to prior day’s close of 73.68. Sep Euro/INR closed at 87.20, GBP/INR at 101.80 and Yen/INR at 67.04. USDINR fwd premia was trading at around 4.30% p.a.

In Sept, FII’S have net bought Rs 236 cr in Equity segment and have net bought Rs 1310 cr of debt. In this financial year, FII’S have net sold Rs 2139 Cr worth of Indian Equities and have bought Rs 9175 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 closed flat on Thursday. DOW declined 271 points (-0.78%). Nikkei was up 1.25% and Hang seng climbed 1.91% on Friday.

Euro closed the week at 1.1815, Pound at 1.3831, Yen at 109.94.

Commodities: Gold is now at USD 1787 and WT1Crude at USD 69.70/Brent at USD 73.25.

Interest rates: USD 10 Yr yield is at 1.343% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.18%.

Economic news: ECB took the decision of ending front loading of PEPP asset purchases and acknowledged inflationary pressure. ECB Chief said that this is not tapering and added that the economy is still not out of problems. On the economic developments, Lagarde reiterated that risks for the economic outlook were “broadly balanced” and “price pressures are building only slowly”. She added that “there remains some way to go before the damage done to the economy by the pandemic is undone”. The central bank upgraded GDP growth forecast to +5% y/y from this year, while keeping projections broadly unchanged for 2022 and 2023.

UK GDP grew just 0.1% mom in July, below expectation of 0.5% mom. Overall, the economy remains -2.1% below its pre-pandemic level in February 2020.

Data highlights: – US weekly jobless claims dipped to 310k, PPI climbed 0.7% m/m.

-UK industrial production climbed 1.2% m/m and manufacturing was flat m/m.

Monday’s calendar: – Indian CPI and IIP

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20, 50 and 100 day major moving averages. 20 day moving average is at 73.80. 50 day moving average is at 74.18.200 day moving average is at 73.60. Daily MACD is in sell zone, implying top at 74.95. Important resistance is at 73.70 and important support is at 72.92. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 73.74, S1:73.52, S2:73.37, R1:73.90, R2:74.11              

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 at around 73.30/73.15. USD exports can be hedged at 73.70. If 73.85 is broken, hedging can be deferred.

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 1.18/1.1665. 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 1.3725 and later at 1.36.Important resistance is at 1.39.

USD/YEN: The pair is between major moving averages. Daily MACD is in sell zone, implying important top at 110.46. Next important resistance is at 110.50/110.80. Important support is at 109.10/108.70.

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