FX MORNING UPDATE :

USDINR opened at 73.49 on Friday and the pair traded in the 73.42-73.55 range. Spot USDINR closed at 73.48, loss of 3 ps USD as against prior close of 73.51. RBI reference rate was fixed at 73.49 on 17/09Sep USD/INR closed at 73.57, loss of 2 ps for USD as compared to prior day’s close of 73.59. Sep Euro/INR closed at 86.70, GBP/INR at 101.48 and Yen/INR at 66.93. USDINR fwd premia was trading at around 4.35% p.a.  FX reserves stands at USD 641.13 bn.

PAIRS RBI REF RATE (17/09)
USDINR 73.49
EURINR 86.52
GBPINR 101.38
JPYINR 66.89

In Sept, FII’S have net bought Rs 5300 cr in Equity segment and have net bought Rs 2255 cr of debt. In this financial year, FII’S have net bought Rs 2925 Cr worth of Indian Equities and have bought Rs 10120 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 0.21% on Friday. DOW declined 166 points (0.48%). Nikkei was up 0.58% and Hang seng climbed 1.03% on Friday.

Euro closed the week at 1.1724, Pound at 1.3736, Yen at 110.

Commodities: Gold is now at USD 1753 and WT1Crude at USD 72/Brent at USD 75.30.

Interest rates: USD 10 Yr yield is at 1.36% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.16%.

Economic news: Govt reform measures in telecom, banking sector and PLI for auto sector propelled markets to new highs. FII’S were net buyers of Equities last week. USDINR was almost unchanged. FOMC meeting is the key event in upcoming week.

Data highlights: – EU CPI climbed 3% y/y and UK retail sales declined -0.9% m/m

Monday’s calendar: – No major data release.

USD/INR      73.55 73.42
EUR/USD     1.1724 1.1789 1.1724
GBP/USD     1.3736 1.3813 1.3728
USD/JPY     110 110.07 109.67

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1745 1.1767  1.1810   1.1766 1.1680  
GBP/USD 1.3759 1.3790  1.3844   1.3705 1.3674  
USD/JPY 109.91  110.15  110.31   109.75 109.51  
USD/INR 73.48 73.54 73.61   73.41 73.35  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1665 1.18/1.1910 DN UP>1.1910
GBP/USD 1.3725/1.36 1.39 SIDE DN<1.3725
USD/JPY 109.10/108.75 110.80/111.60 UP DN<108.70
USD/INR 73.33 73.60/73.72/73.85 DN UP>73.85
USD/CHF 0.9240 0.9375/0.9475 UP DN<0.9240

Technicals: Spot closed below 20, 50 and 100 day major moving averages. 20 day moving average is at 73.60. 50 day moving average is at 74.10.200 day moving average is at 73.58. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 73.62/73.85 and important support is at 73.33. Spot closed at its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 73.56, S1:73.49, S2:73.41, R1:73.64, R2:73.71              

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 73.60/73.70. 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 50, 100 and 200 day moving averages. Major resistance is at 1.18/1.1910. Next major support is at 1.1665. 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 1.39 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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