FX MORNING UPDATE

USDINR opened at 77.69 y’day and the pair traded in the 77.51-77.71 range. Spot USDINR closed at 77.51, loss of 3 ps for USD as against prior close of 77.54. RBI reference rate was fixed at 77.59 on 23/05May USD/INR closed at 77.74, gain of 4 ps for USD as compared to prior day’s close of 77.70. May Euro/INR closed at 82.80, GBP/INR at 97.64 and Yen/INR at 60.85. USDINR fwd premia was trading at around 3.75% p.a.  FX reserves stands at USD 597.73 bn as on 29/4.

PAIRSRBI REF RATE (23/05)
USDINR77.59
EURINR82.28
GBPINR97.52
JPYINR60.72

In 2022-23, FII’S have sold 40537 Cr of Equities till date and have sold Rs 7327 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 climbed 456 points (2.89%) on Friday. DOW climbed 617 points (1.98%).Nikkei climbed 0.98% and Hang Seng declined 1.19%.

Euro is now at 1.0671, Pound at 1.2559, Yen at 127.70.

Commodities: Gold is now at USD 1850 and WT1Crude at USD 109.35/Brent at USD 110.

Interest rates: USD 10 Yr yield is at 2.84% and 3 m libor closed at 1.46%. Indian 10 yr benchmark yield closed at 7.35%.

Economic news: RBI Governor said that recent steps taken by RBI and the Govt will have sobering effect on inflation. Indian metal stocks slumped as Govt imposed export duty on steel item exports. Govt has recently restricted Wheat exports and has slashed excise duty on petrol and diesel and announced Gas Cylinder subsidy and fertiliser subsidy.

ECB President Christine Lagarde said she expects net asset purchases under the APP to “end very early in the third quarter”. “This would allow us a rate lift-off at our meeting in July, in line with our forward guidance,” she said. Euro rallied after ECB Chairperson’s hawkish comments.

Data highlights: – : No major data release.

Tuesday’s calendar : US

New home sales

-EU PMI(mfrg)

-UK PMI(mfrg) and PMI(services)

USD/INR   77.6177.49
EUR/USD      1.06711.06971.0568
GBP/USD      1.25591.26011.2500
USD/JPY      127.70127.96127.15

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.06501.07321.07791.08611.06031.05211.0474
GBP/USD1.25561.26121.26571.27131.25111.24551.2409
USD/JPY127.64128.13128.44128.93127.32126.84126.52
USD/INR77.5877.6577.78 77.4577.38 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.03401.0640/1.0750DNSIDE>1.0640
GBP/USD1.2165/1.20301.2640/1.28DNSIDE>1.2640
USD/JPY127.10/125131.30UPDN<127.10
USD/INR77.48/77.27/77.1577.80/78UPSIDE<77.48
USD/CHF0.97400.9855/1.0066SIDEUP>0.9855

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 77. 50 day moving average is at 76.51.200 day moving average is at 75.05. Daily MACD is in buy zone, implying bottom at 76. Important supports are at 77.48/77.27/77.15 and important resistance is at 77.80/78. Spot closed below its average level of the day.

Intraday supports and resistances for May contract are:

PP: 77.63, S1:77.48, S2:77.40, R1:77.71, R2:77.86.             

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

However on directional basis, suggest the following:

USDINR Exports can be partially hedged at 77.70+ levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0640. Next major support is at 1.0350. Daily MACD is in buy zone, implying an important bottom at 1.0350. Weekly MACD is in sell zone, implying important top at 1.1498.

GBP/USD: The pair is below 50 and 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.2165 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2165/1.2030. Important resistance is at 1.2640/1.28.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 131.30. Important support is at 127.10/125.

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