USDINR opened at 74.36 on Friday and the pair traded in the 74.25-74.38 range. Spot USDINR closed at 74.31, loss of 18 ps for USD as against prior close of 74.49. RBI reference rate was fixed at 74.29 on 07/01. Jan USD/INR closed at 74.50, loss of 12 ps for USD as compared to prior day’s close of 74.62. Jan Euro/INR closed at 84.33, GBP/INR at 100.93 and Yen/INR at 64.38. USDINR fwd premia was trading at around 4.60% p.a.  FX reserves stands at USD 633 bn.

In Jan, FII’S have net bought Rs 1948 cr in Equity segment and have net bought Rs 66 cr of debt. In this financial year, FII’S have net sold Rs 890 Cr worth of Indian Equities and have bought Rs 2959 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 66 points (0.38%). DOW closed flat (%). Nikkei declined 0.03% and Hang seng climbed 1.82% .

Euro closed at 1.1361, Pound at 1.3585, Yen at 115.55.

Commodities: Gold is now at USD 1796 and WT1Crude at USD 78.90/Brent at USD 81.75.

Interest rates: USD 10 Yr yield is at 1.765% and 3 m libor closed at 0.22%. Indian 10 yr benchmark yield closed at 6.54%.

Economic news: US non-farm payroll employment rose only 199k in December, much worse than expectation of 400k. Overall job growth averaged 537k per month in 2021. Non-farm employment remained -3.6m, or -2.3%, from its pre-pandemic level in February 2020.Unemployment rate dropped to 3.9%, down from 4.2%, better than expectation of 4.1%. Average hourly earnings rose strongly by 0.6% mom, above expectation of 0.4%.

FX markets did not show much reaction to US employment data as it was mixed. Focus is on US Fed Chairman’s testimony to US Congress and CPI, retail sales data.

Indian IIP and CPI releases are other key events for the week.

Data highlights: – -EU CPI climbed 5% y/y. Retail sales rose 1% m/m.

-UK PMI(construction) improved to 54.3.

Monday’s calendar: – EU sentix investor confidence survey

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 75.20. 50 day moving average is at 74.91.200 day moving average is at 74.10. Daily MACD is in sell zone, implying top at 76.32. Important resistance is at 74.60/74.85 and important support is at 74.10 and later at 73.85. Spot closed at its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 74.51, S1:74.42, S2:74.33, R1:74.59, R2:74.69.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR imports can be hedged.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1385/1.1535. Next major support is at 1.12. Daily MACD is in buy zone, implying an important bottom at 1.1185. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is above 50 , but below 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.3170 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.34. Important resistance is at 1.37.

USD/YEN: The pair is above 50 and 200 day major moving averages. Daily MACD is in buy zone, implying important bottom at 112.50. Next important resistance is at 116.35. Important support is at 114.30

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