USDINR opened gap up at 75.18 y’day and the pair traded in the 75.07-75.31 range. Spot USDINR closed at 75.08, gain of 30 ps for USD as against prior close of 74.78. RBI reference rate was fixed at 75.17 on 27/01. Feb USD/INR closed at 75.39, gain of 37 ps for USD as compared to prior day’s close of 75.02. Feb Euro/INR closed at 84.45, GBP/INR at 101.01 and Yen/INR at 65.51. USDINR fwd premia was trading at around 4.57% p.a.  

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 125 points (-0.73%). DOW declined 129 points (-0.38%). Nikkei declined -3.11% and Hang Seng declined -2% y’day.

Euro closed at 1.1145, Pound at 1.3390, Yen at 115.44.

Commodities: Gold is now at USD 1797 and WT1Crude at USD 87/Brent at USD 88.45.

Interest rates: USD 10 Yr yield is at 1.85% and 3 m libor closed at 0.22%. Indian 10 yr benchmark yield closed at 6.73%.

Economic news: US GDP grew by 6.9% annualized in last quarter of last fiscal. On the whole, US GDP climbed 5.7% in 2021, fastest since 1984. In 2020, GDP declined by -3.4%.

Fed Chair Jerome Powell told reporters on Wednesday after a two-day policy meeting that “the economy no longer needs sustained high levels of monetary policy support,” and that “it will soon be appropriate to raise” rates.

USD surged and Equity markets are jolted by Fed’s hawkish comments.

Data highlights: – US durables order declined -0.9% m/m, pending home sales declined -3.8% m/m and weekly jobless claims was reported at 206k.

Friday’s calendar: – US personal income, spending and Core PCE index

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 74.36. 50 day moving average is at 74.86.200 day moving average is at 74.10. Daily MACD is in buy zone, implying bottom at 73.80. Important resistance is at 75.35/75.60 and important support is at 74.95/74.72. Spot closed below its average level of the day.

Intraday supports and resistances for Feb contract are:

PP: 75.38, S1:75.21, S2:75.04, R1:75.55, R2:75.72.             

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 1.11.. 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 116.35. Important support is at 112.50

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