16/08/2018                                                                           

USDINR opened at 69.83 on Tuesday and the pair traded in the 69.70-70.08 range. Spot USDINR closed at 69.90, loss of 3 ps ps for USD as against prior close of 68.93.RBI reference rate was fixed at 69.77. Rupee has declined 10% from its high levels of 63.25 in this calendar year. Rupee pulled back from 70.08 on RBI intervention. Equity markets remained unfazed by Rupee fall.  Aug USD/INR closed at 70, loss of 5  ps for USD as compared to prior day’s close of 70.05. Aug Euro/INR closed at 79.89, GBP/INR at 89.45 and Yen/INR at 63.13.

FII’S have bought Rs 1469 Cr of Indian Equities in Aug till date . FII’S have bought Rs 5500 Cr of Indian debt securities in Aug till date . On a cumulative basis, FII’S have bought Rupees 3498 Cr of Indian Equities till date for this calendar year and have sold  Rupees 35639 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.70% on Tuesday. DOW declined 137 points (0.54%) y’day. Nikkei declined 0.68% and Hang seng declined 1.55% y’day.

Euro is now at 1.1374, Pound at 1.2715,Yen at 110.84.    

Commodities: Gold is now at USD 1179 and WT1Crude at USD 64.97.

Interest rates: USD 10 Yr yield is at 2.85% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.82%.        

Economic news: Indian trade deficit widened in July to USD 18 bn as against USD 11.5 bn in July 2017. Exports climbed 14.3% to USD 25.8 bn. Imports expanded 28.8% to USD 43.8 bn, due to climb in Oil imports. Oil imports grew to USD 12.4 bn and Gold imports climbed to USD 2.9 bn. Imports in Apr-July is up 17.1% to USD 171.2 bn, while exports climbed 14.2% to USD 108.2 bn, during the same period. Services receivables climbed to USD 16.9 bn in June while services imports climbed marginally to USD 10.3bn. RBI releases services data with one month time lag.                                                                                                    

July CPI inflation declined to 4.17% from prior month reading of 4.92%, due to declined in food inflation to 1.37%.

Yuan declined to 6.934 and USD rallied further against majors due to strong US data and simeering trade tensions.

Data Highlights : -US Core retail sales climbed 0.6% m/m, Ny mfrg index was better than expected at 25.6 and industrial production climbed 0.1% m/m.

-EU and German Zew survey were better than expected at -11.1 and -13.7 respectively, industrial production declined -0.7% m/m and GDP climbed 0.5% q/q, better than expected.

-UK claimant count change was at 6.2k  and unemployment rate dipped to 4%.

-UK CPI climbed 2.5% y/y, RPI climbed 3.2% y/y and PPI(output) was flat m/m.

Thursday’s calendar: – US building permits, housing starts, weekly jobless claims and Phily fed mfrg index.

-UK retail sales.                     

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 68.84. 50 day moving average is at 68.46. 200 day moving average is at 65.90. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 69.70 and later at 69.10. Important resistance is at 70.40. Spot closed below its average level of the day.  

Intra day supports and resistances for Aug contract are:

PP: 69.98,S1:69.78, S2:69.56, R1:70.20, R2:70.40.                                                              

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day major moving averages. Next Major resistance is at 1.1510 and later at 1.1620. Major support is at 1.13. Daily MACD is in sell zone, implying an important top at 1.1850. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in sell zone, implying important top at 1.3215 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.2957 and later at 1.3050. Important support is at 1.26.           

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 113. Next important support is at 110.20 and later at 109.20. Important resistance is  113.