USDINR opened gap up at 77.10 y’day and the pair traded in the 77.10-77.53 range. Spot USDINR closed at 77.46, gain of 50 ps for USD as against prior close of 76.92. RBI reference rate was fixed at 77.37 on 09/05. May USD/INR closed at 77.66, gain of 57 ps for USD as compared to prior day’s close of 77.09. May Euro/INR closed at 81.91, GBP/INR at 95.84 and Yen/INR at 59.29. USDINR fwd premia was trading at around 4.05% p.a.  FX reserves stands at USD 597.73 bn as on 29/4.

Rupee declined further to hit 77.53, even as RBI sold USD sporadically to check free fall. RBI’S ability to defend Rupee is diminishing due to fall in FX reserves. RBI may only be slowing down Rupee decline, till fundamentals change in favor of Rupee.

In 2022-23, FII’S have sold 6933 Cr of Equities till date and have sold Rs 2675 Cr of debt till date. In 2021-22, FII’S 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 declined 110 points (0.67%) on y’day. DOW declined 653 points (1.99%).Nikkei declined 2.53% and Hang Seng declined 3.81%.

Euro is now at 1.0561, Pound at 1.2344, Yen at 130.

Commodities: Gold is now at USD 1854 and WT1Crude at USD 101/Brent at USD 104.

Interest rates: USD 10 Yr yield is at 3% and 3 m libor closed at 1.36%. Indian 10 yr benchmark yield closed at 7.45%.

Economic news: Focus is on US and Indian Inflation. Fed members expressed confidence that inflation will be tamed and there is no need to move more aggressively than what has been done. Fed members expect 2 to 3 times of 50 bps rate hike and then pause to see how economy responds.

US Stocks led by megacap tech stocks melted on increasing worries about rising interest rates.

USDINR fwd premia climbed to 4.15% per annum for 1 year, tracking hike in repo rates. 10 Year yield jumped further to 7.46%.

Data highlights: – EU Sentix investor confidence survey declined to -22.6.

Tuesday’s calendar: – EU and German Zew survey

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 76.40. 50 day moving average is at 76.12.200 day moving average is at 74.92. Daily MACD is in buy zone, implying bottom at 76. Important supports are at 76.95/76.78 and important resistance is at 77.60/78/78.25. Spot closed above its average level of the day.

Intraday supports and resistances for May contract are:

PP: 76.52, S1:77.33, S2:77, R1:77.85, R2:78.04.             

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

However on directional basis, suggest the following:

USDINR Exports can be hedged at 77+ levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major major moving averages. Major resistance is at 1.0750/1.0940. Next major support is at 1.0475/1.0340.. Daily MACD is in sell zone, implying an important top at 1.1185. 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 sell zone, implying important top at 1.33 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2260. Important resistance is at 1.2410/1.2640.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 114.40. Important support is at 128.65/127.10.

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