Fx-Morning-Update

27/08/2018

FX MORNING UPDATE                                                                                     

USDINR opened at 70.20 on Friday and the pair traded in the 69.88-70.31 range. Spot USDINR closed at 69.90, loss of 21 ps ps for USD as against prior close of 70.11.RBI reference rate was fixed at 70.13. Rupee has declined 10% from its high levels of 63.25 in this calendar year. Aug USD/INR closed at 69.93, loss of 20 ps for USD as compared to prior day’s close of 70.13. Aug Euro/INR closed at 81, GBP/INR at 89.85 and Yen/INR at 62.80.

FII’S have bought Rs 728 Cr of Indian Equities in Aug till 21/8 . FII’S have bought Rs 3264 Cr of Indian debt securities in Aug 21/8 . On a cumulative basis, FII’S have bought Rupees 2758 Cr of Indian Equities till date for this calendar year and have sold  Rupees 37875 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.22% on Friday. DOW climbed 133 points (0.52%) on Friday. Nikkei climbed 0.85% and Hang seng declined 0.43 % y’day.

Euro closed the week at 1.1623, Pound at 1.2849,Yen at 111.27. 

Commodities: Gold is now at USD 1212 and WT1Crude at USD 68.54.

Interest rates: USD 10 Yr yield is at 2.83% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.87%.   

Economic news: US durables order data suggests that the impact from escalation of US-China trade war didn’t have material impact of business investments yet, despite the cries for lower confidence. 

Fed speakers expressed mixed view on economy and rate hike. St. Louis Fed President James Bullard said in an interview that he doesn’t see much inflation in the economy. And, he went further saying that it’s not a situation where Fed has to be “pre-emptive”. 

However, Cleveland Fed President Loretta Mester said there’s more momentum in the economy then she anticipated. And, she’s been “upping” her forecasts, now expecting 2.75-3.00% for the year, and “probably close to 3%. She still favors rate hike so that neutral rate of 3% is attained.

Data Highlights : – US durables order declined -1.7% m/m.

-Japanese CPI climbed 0.8% y/y.

Monday’s calendar: -German Ifo survey

USD/INR   70.31 69.88
EUR/USD 1.1623 1.1640 1.1538
GBP/USD 1.2849 1.2881 1.2799
USD/JPY 111.27 111.48 111.11

Daily Support/Resistance table

CurrencyPairs

Pivot

R1

R2

R3

S1

S2

S3

EURO/USD

1.1600

1.1662

 1.1702

 

 1.1560

1.1498

 

GBP/USD

1.2843

1.2887

 1.2925

 

 1.2805

1.2761

 

USD/JPY

111.28

 

111.46

111.66

 

 

 111.08

110.90

 

 

USD/INR

70.03

70.18

70.46

 

69.75

69.60

 

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair

Supports

Resistances

Trend

Remarks

EURO/USD

1.13/1.1120

1.1775

SIDE

DN<1.15

GBP/USD

1.2660

1.2957/1.3050

DN

SIDE>1.2950

USD/JPY

109.70

113.10

UP

DN<109.70

USD/INR

69.52/69.30/69.10

70.40/70.75

UP

SIDE<69.10

USD/CHF

0.9785

1.0060

UP

 DN <0.9785

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 69.11. 50 day moving average is at 68.75. 200 day moving average is at 66.10. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 69.52 and later at 69.30. Important resistance is at 70.40. Spot closed below its average level of the day.  

Intra day supports and resistances for Aug contract are:

PP: 70.03,S1:69.80, S2:69.68, R1:70.15, R2:70.38.                                                              

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day major moving averages. Next Major resistance is at 1.1775. Major support is at 1.13. Daily MACD is in buy zone, implying an important bottom at 1.13. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in buy zone, implying important bottom at 1.2662 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.2957 and later at 1.3050. Important support is at 1.2660.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.70. Next important support is at 109.70. Important resistance is  113.

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