USDINR opened at 74.04 on Friday and the pair traded in the 74.04-74.21 range. Spot USDINR closed at 74.15, gain of 26 ps for USD as against prior close of 73.89. RBI reference rate was fixed at 74.11 on 14/01. Jan USD/INR closed at 74.21, gain of 18 ps for USD as compared to prior day’s close of 74.03. Jan Euro/INR closed at 84.99, GBP/INR at 101.84 and Yen/INR at 65.12. USDINR fwd premia was trading at around 4.75% p.a.  FX reserves stands at USD 633 bn.

In Jan, FII’S have net bought Rs 2593 cr in Equity segment and have net bought Rs 255 cr of debt. In this financial year, FII’S have net sold Rs 245 Cr worth of Indian Equities and have bought Rs 3148 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 closed flat on Friday (%). DOW climbed 38 points (0.11%). Nikkei declined 1.28% and Hang seng declined 0.19% .

Euro closed at 1.1416, Pound at 1.3677, Yen at 114.19.

Commodities: Gold is now at USD 1817 and WT1Crude at USD 84.25/Brent at USD 86.35.

Interest rates: USD 10 Yr yield is at 1.79% and 3 m libor closed at 0.22%. Indian 10 yr benchmark yield closed at 6.58%.

Economic news: US retail sales dropped -1.9% mom to USD 626.8B in December, much worse than expectation of 0.0%. Ex-auto sales dropped -2.3% mom, below expectation of 0.2% mom. Total sales for the 12 months of 2021 were up 19.3% from 2020.

US stocks declined and USD corrected lower against majors.

UK GDP rose strongly by 0.9% mom in November, well above expectation 0.4% mom.

ECB President Christine Lagarde said the “rapid reopening” of the economy has led to steep rises in fuel prices, gas and electricity and price hikes in durable goods and some services. These factors are “weighing on growth in the near term”. She noted that “at the same time, monetary accommodation is still needed for inflation to settle at 2% over the medium term.”

Data highlights: – US weekly jobless claims climbed to 230k and PPI climbed 0.2% m/m.

-US retail sales declined -1.9% m/m and industrial production declined -0.1% m/m.

-UK industrial and manufacturing production climbed 1% and 1.1% m/m respectively.

Monday’s calendar: – No major data release.

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 200 day major moving averages.20 day moving average is at 74.61. 50 day moving average is at 74.81.200 day moving average is at 74.10. Daily MACD is in sell zone, implying top at 76.32. Important resistance is at 74.30/74.60 and important support is at 73.85/73.70. Spot closed above its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 74.18, S1:74.05, S2:73.89, R1:74.34, R2:74.47.             

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 100 and 200 day moving averages, but above 20 and 50 day averages. Major resistance is at 1.1525. Next major support is at 1.1365 and later at 1.1280/1.12. 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 1.3750/1.3850.

USD/YEN: The pair is above 100 and 200 day major moving averages., but below 20 day moving average. Daily MACD is in sell zone, implying important top at 116.35. Next important resistance is at 116.35. Important support is at 112.50.

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