USDINR opened at 75.02 on Friday and the pair traded in the 74.92-75.16 range. Spot USDINR closed at 74.99, gain of 21 ps USD as against prior close of 74.78. RBI reference rate was fixed at 74.99 on 08/10. Oct USD/INR closed at 75.12, gain of 25 ps for USD as compared to prior day’s close of 74.87. Oct Euro/INR closed at 86.87, GBP/INR at 102.31 and Yen/INR at 67.22. USDINR fwd premia was trading at around 4.40% p.a.  

In Oct, FII’S have net bought Rs 3522 cr in Equity segment and have net bought Rs 57 cr of debt. In this financial year, FII’S have net bought Rs 8809 Cr worth of Indian Equities and have bought Rs 19445 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 0.59% on FrIday. DOW closed flat on Friday (0.00%). Nikkei was up 1.34% and Hang seng climbed 0.55% on Friday.

Euro closed at 1.1567, Pound at 1.3611, Yen at 112.22.

Commodities: Gold is now at USD 1756 and WT1Crude at USD 79.60/Brent at USD 82.54.

Interest rates: USD 10 Yr yield is at 1.61% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.31%.

Economic news: RBI maintained status quo on repo and reverse repo rates. Repo rate is at 4%. GDP is expected to be 9.5% and inflation is expected to be 5.3% for full year. RBI Governor said that he is optimistic on growth and said that investment activity has picked up.

Indian 10 Year G-SEC bond yields crossed 6.30%. Rupee’s decline remained intact as Crude rose sharply from the previous day’s low. Equity market surge remained unabated. CPI and IIP are key data events for next week.

US non-farm payroll employment grew 194k only in September, well below expectation of 500k. Total employment is still down by -5.0m, or -3.3% from its pre-pandemic level in February 2020. Unemployment rate dropped notably from 5.2% to 4.8%, better than expectation of 5.1%. Labor force participation rate was little changed at 61.6%. Average hourly earnings rose 0.6% mom versus expectation of 0.5% mom.

There was little reaction in FX markets as Euro continued to trade near its recent lows.

Data highlights: – US unemployment rate declined to 4.8%.

Monday’s calendar: – No major data release.

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 73.97. 50 day moving average is at 73.96.200 day moving average is at 73.60. 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: 75.12 S1:74.95, S2:74.79, R1:75.28, R2:75.45              

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 74.50. Exports can be hedged at 75.18/75.50.

Exporters can hedge EURINR receivables exposure at 87.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1640/1.1750. Next major support is at 1.1530/1.1480. 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 buy zone, implying important bottom at 1.3410 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3410.Important resistance is at 1.3650/1.3735.

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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