FX MORNING UPDATE  :

USDINR opened at 73.78 on Friday and the pair traded in the 73.62-73.78 range. Spot USDINR closed at 73.70, gain of 6 ps USD as against prior close of 73.64. RBI reference rate was fixed at 73.69 on 24/09Sep USD/INR closed at 73.77, gain of 3 ps for USD as compared to prior day’s close of 73.74. Sep Euro/INR closed at 86.53, GBP/INR at 101 and Yen/INR at 66.80. USDINR fwd premia was trading at around 4.35% p.a.  FX reserves stands at USD 641.13 bn.

PAIRS RBI REF RATE (24/09)
USDINR 73.69
EURINR 86.47
GBPINR 101.12
JPYINR 66.66

In Sept, FII’S have net bought Rs 8773 cr in Equity segment and have net bought Rs 4548 cr of debt. In this financial year, FII’S have net bought Rs 6398 Cr worth of Indian Equities and have bought Rs 12413 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 0.17% on Friday. DOW climbed 33 points (0.12%). Nikkei was up 2.06% and Hang seng declined 1.30% on Friday.

Euro closed the week at 1.1719, Pound at 1.3675, Yen at 110.74.

Commodities: Gold is now at USD 1750 and WT1Crude at USD 74/Brent at USD 78.

Interest rates: USD 10 Yr yield is at 1.46% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.17%.

Economic news: Energy prices soared on increasing demand and expectation of cold weather in Europe. US Yields jumped higher on hawkish twist by Fed. USD is supported by tapering expectation. US and Indian stocks continued to be resilient. Indian indices extended their rally as sensex crossed 60k.

Data highlights: – US Weekly jobless claims climbed to 351k and new home sales climbed to 740k.

-EU PMI(flash-mfrg) declined to 58.7 and PMI(flash-services) dipped to 56.3.

-UK PMI(mfrg) dipped to to 56.3 and PMI(services) declined modestly to 54.6.

Monday’s calendar: – US durables order

USD/INR      73.78 73.62
EUR/USD     1.1719 1.1748 1.1701
GBP/USD     1.3675 1.3736 1.3658
USD/JPY     110.74 110.79 110.32

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1722 1.1744  1.1769    1.1696 1.1675  
GBP/USD 1.3689 1.3721  1.3767    1.3642 1.3611  
USD/JPY 110.61  110.91  111.08   110.43 110.14  
USD/INR 73.70 73.78 73.86   73.62 73.54  

 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 1.36 1.39 DN UP>1.39
USD/JPY 109.10/108.75 111.60 UP DN<109.10
USD/INR 73.33 74.10 UP DN<73.33
USD/CHF 0.92/0.91 0.9375/0.9475 UP DN<0.91

Technicals: Spot closed below 50 and 100 day major moving averages, but above 20 and 200 day moving averages. 20 day moving average is at 73.45. 50 day moving average is at 74.200 day moving average is at 73.57. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 74.10 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: 73.75, S1:73.66, S2:73.54, R1:73.86, R2:73.96              

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 73.50/73.30.

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 1.36.Important resistance is at 1.39.

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

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