USDINR opened at 74.51 on Friday and the pair traded in the 74.40-74.55 range. Spot USDINR closed at 74.43, loss of 8 ps for USD as against prior close of 74.51. RBI reference rate was fixed at 74.36 on 20/01. Jan USD/INR closed at 74.45, loss of 10 ps for USD as compared to prior day’s close of 74.55. Jan Euro/INR closed at 84.40, GBP/INR at 100.92 and Yen/INR at 65.40. USDINR fwd premia was trading at around 4.75% p.a.  FX reserves stands at USD 633 bn.

In Jan, FII’S have net sold Rs 8054 cr in Equity segment and have net bought Rs 2696 cr of debt. In this financial year, FII’S have net sold Rs 13270 Cr worth of Indian Equities and have bought Rs 5589 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 139 points (-0.79%). DOW declined 450 points (-1.30%). Nikkei declined -0.9% and Hang seng climbed 0.05% .

Euro closed at 1.1303, Pound at 1.3584, Yen at 113.78.

Commodities: Gold is now at USD 1832 and WT1Crude at USD 84.85/Brent at USD 87.75.

Interest rates: USD 10 Yr yield is at 1.77% and 3 m libor closed at 0.22%. Indian 10 yr benchmark yield closed at 6.62%.

Economic news: Disappointing earnings from leading US Companies pushed indices down. Tech Index Nasdaq is down over 14%. Global indices are tracking US indices and Indian Nifty also ended sharply lower. All eyes are on the Federal Reserve next week as monetary policymakers conduct the first of the eight planned FOMC meetings for 2022. Interest rates have jumped since the FOMC last met on Dec. 15. 10 Year yields had jumped 30 bps since last meeting on Dec 15 th.

Data highlights: – EU Consumer confidence was reported at -9.

-UK retail sales declined -3.7% m/m.

Monday’s calendar: – EU PMI(mfrg-flash) and PMI(services- flash)

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 74.40. 50 day moving average is at 74.84.200 day moving average is at 74.10. Daily MACD is in buy zone, implying bottom at 73.80. Important resistance is at 74.72/74.95 and important support is at 74.30/74.10. Spot closed below its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 74.49, S1:74.40, S2:74.26, R1:74.63, R2:74.72.             

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 all major moving averages. Major resistance is at 1.1485. Next major support is at 1.1280 and later at 1.12. Daily MACD is in sell zone, implying an important top at 1.1485. 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 sell zone, implying important bottom at 1.3170 and weekly MACD is in sell zone, implying important top at 1.3750. 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 and 50 day moving averages. Daily MACD is in sell zone, implying important top at 116.35. Next important resistance is at 115.10/116.35. Important support is at 112.50

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