USDINR opened at 74.63 y’day and the pair traded in the 74.54-74.99 range. Spot USDINR closed at 74.98, gain of 53 ps USD as against prior close of 74.45. RBI reference rate was fixed at 74.63 on 06/10. Oct USD/INR closed at 75.17, gain of 50 ps for USD as compared to prior day’s close of 74.67. Oct Euro/INR closed at 86.79, GBP/INR at 101.99 and Yen/INR at 67.45. USDINR fwd premia was trading at around 4.40% p.a.  

In Sept, FII’S have net bought Rs 7662 cr in Equity segment and have net bought Rs 11523 cr of debt. In this financial year, FII’S have net bought Rs 5287 Cr worth of Indian Equities and have bought Rs 19388 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 0.99% y’day. DOW climbed 102 points (0.30%). Nikkei was down 1.05% and Hang seng declined 0.57% y’day.

Euro is now at 1.1592, Pound at 1.3620, Yen at 111.59.

Commodities: Gold is now at USD 1759 and WT1Crude at USD 76.65/Brent at USD 80.60.

Interest rates: USD 10 Yr yield is at 1.54% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.28%.

Economic news: Rupee declined further on hectic USD buying by custodial banks. Crude rally has triggered trade deficit worries. RBI policy on Oct 8 th and US employment data are key events for the week. Rupee’s fall below 74.92 has deepened Rupee declining trend. USDINR will be favored for buying on dips. Global stock markets declined as yields surged due to inflationary fears. However, they are recovering as US lawmakers inch towards a solution to avoid debt default. Russia assured Europe of more natural gas supply. US Crude stocks rose and contributed to mild correction in Crude prices.

Data highlights: – US ADP employment report was better than expected with private sector adding 568k jobs.

-German factory orders declined -7.7% m/m and EU retail sales climbed 0.3% m/m.

-UK PMI(construction) dipped to 52.6.

Thursday’s calendar: – US non farmpayrolls.

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50 and 100,200 day major moving averages.20 day moving average is at 73.88. 50 day moving average is at 73.94.200 day moving average is at 73.58. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 75.16/75.50 and important support is at 74.50. Spot closed above its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 75.02 S1:74.82, S2:74.49, R1:75.36, R2:75.55              

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 73.85/73.75.

Exporters can hedge EURINR receivables exposure at 86.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1660/1.1765. Next major support is at 1.1510. 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 1.3410.Important resistance is at 1.36/1.3735.

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 112.80. Important support is at 110.80/110.45.

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