FX MORNING UPDATE 

USDINR opened at 75.72 y’day and the pair traded in the 75.66-75.83 range. Spot USDINR closed at 75.78, loss of 13 ps for USD as against prior close of 75.91. RBI reference rate was fixed at 75.81 on 31/03. Apr USD/INR closed at 75.96, loss of 21 ps for USD as compared to prior day’s close of 76.17. Apr Euro/INR closed at 84.38 GBP/INR at 99.74 and Yen/INR at 62.52. USDINR fwd premia was trading at around 3.75% p.a.  Market was closed on Friday.

PAIRSRBI REF RATE (31/03)
USDINR75.81
EURINR84.66
GBPINR99.55
JPYINR62.20

In 2021-22, FII’S have net sold Rs 128897 cr in Equity segment and have net bought Rs 4805 cr of 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 205 points (1.18%) on Friday. DOW climbed 139 points (0.40%) . Nikkei declined 0.73% and Hang Seng declined 0.76% on Friday.

Euro closed at 1.1041, Pound at 1.3114, Yen at 122.54.

Commodities: Gold is now at USD 1924 and WT1Crude at USD 99.40/Brent at USD 108.35.

Interest rates: USD 10 Yr yield is at 2.39% and 3 m libor closed at 1.00%. Indian 10 yr benchmark yield closed at 6.84%.

Economic news: US non-farm payroll employment grew 431k in March, lower than expectation of 488k. Overall job growth averaged 562k per month in Q1.Unemployment rate dropped from 3.8% to 3.6%, better than expectation of 3.7%. Labor force participation rate rate little changed at 62.4%.

Average hourly earnings rose 0.4% mom, matched expectations.

Eurozone CPI accelerated sharply from 5.9% yoy to record high at 7.5% yoy in March, above expectation of 6.5% yoy. Core CPI also rose from 2.7% yoy to 3.0% yoy, but missed expectation of 3.1% yoy.

German PMI(mfrg) declined to 18 months low, implying strong headwinds from Russian invasion of Ukraine.

Data highlights: – US ISM (mfrg) dipped to 57.1  and construction spending climbed 0.5% m/m.

-EU CPI climbed 7.5% y/y, PMI(mfrg) dipped to 56.5.

-UK PMI(mfrg) dipped to 55.2.

Monday’s calendar: – US Factory orders

-EU Sentix investor confidence survey

USD/INR   75.8375.66
EUR/USD     1.10411.11281.1075
GBP/USD     1.31141.31471.3086
USD/JPY      122.54123.03121.75

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.10811.10871,1134 1.10341.1028 
GBP/USD1.31151.31451.3176 1.30831.3054 
USD/JPY122.44123.13 123.72 121.85121.16 
USD/INR75.7575.8575.92 75.6775.58 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.08051.1180DNSIDE>1.1230
GBP/USD1.301.33/1.3440DNUP>1.3440
USD/JPY121.10/118..70125.10UPDN<116.40
USD/INR75.65/75.3076.35/76.48/76.70SIDEUP>76.25
USD/CHF0.920.9383/0.9460SIDEUP>0.94

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 76.28. 50 day moving average is at 75.45.200 day moving average is at 74.60. Daily MACD is in sell zone, implying top at 77. Important resistances are at 76.48/76.70 and important supports are at 75.65/75.30. Spot closed above its average level of the day.

Intraday supports and resistances for Apr contract are:

PP: 76.01 S1:75.82, S2:75.68, R1:76.15, R2:76.34.             

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

However on directional basis, suggest the following:

USDINR exports can be hedged, despite technical weakness in Rupee.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major major moving averages. Major resistance is at 1.1180/1.1485. Next major support is at 1.0805.. Daily MACD is in buy zone, implying an important bottom at 1.0805. Weekly MACD is in sell zone, implying important top at 1.1498.

GBP/USD: The pair is below all moving averages. Daily MACD is in buy zone, implying important bottom at 1.30 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.30. Important resistance is at 1.33/1.3440.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 114.40. Next important resistance is at 125.10. Important support is at 121.10/118.70.

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