26/04/2018

FX MORNING UPDATE                                                                                      

USDINR opened gap up at 66.05 on Friday and the pair traded in the 65.98-66.13 range. USDINR closed at 66.12, gain of 33 ps for USD as against prior close of 65.79.RBI reference rate was fixed at 66.02. April USD/INR closed at 66.13, gain of 33 ps for USD as compared to prior day’s close of 65.80. April Euro/INR closed at 81.39, GBP/INR at 93 and Yen/INR at 61.43.

Rupee continued to weaken on climbing crude prices. Rupee weakness was controlled by RBI selling at 66.08+ levels in morning session. However, later during close time, Rupee weakened further to 66.13. RBI’s April minutes showed that RBI was hawkish than perceived on the day of monetary policy meeting. Possibility of rate hike, surging yields, higher trade deficit and FII selling triggered further Rupee weakness last week.

FII’S have sold Rs 4181 Cr of Indian Equities in April till date . FII’S have sold 3586 Cr of Indian debt securities in April . On a cumulative basis, FII’S have bought Rupees 10702 Cr of Indian Equities till date for this calendar year and have sold  Rupees 5487 Cr of Indian debt in this calendar year till date.

Benchmark Nifty closed flat on Friday. DOW declined 201 points (0.82%) on Friday.Nikkei declined 0.13%  and Hang seng declined 0.94% on Friday.

Euro is now at 1.2288, Pound at 1.4002,Yen at 107.66.    

Commodities: Gold is now at USD 1337 and WT1Crude at USD 68.28.

Interest rates: USD 10 Yr yield is at 2.95% and 3 m libor closed at 2.29%. Indian 10 yr benchmark yield closed at 7.72%.        

Economic news:  In a speech, US President expressed concern over Oil prices and said that with so much of stock floating, it is  surprising to note the steep rise in Crude prices.

Sterling and commodity currencies weakened against USD. Inflation data from UK has curtailed rate hike chances by BOE. EURO also weakened ahead of ECB policy meeting later this week. USD rally was aided by surge in US Yields.                                        

Data Highlights: – EU consumer confidence closed flat.

Monday’s calendar: – -US existing home sales

-EU PMI(mfrg-flash) and PMI(services- flash)

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving         is at 65.26. 50 day moving average is at 64.95. 200 day moving average is at 64.45. Daily MACD is in buy zone, implying bottom at 64.85 . Important support zone is at 65.90 and later at 65.30. Important resistance is  at 66.70. Spot closed above its average level of the day.  

Intra day supports and resistances for April contract are:

PP: 66.06,S1:65.99, S2:65.85, R1:66.20, R2:66.27

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

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 100 and 200 day major moving averages, but below 20 and 50 day moving averages. Next Major resistance is at 1.2415 and later at 1.2475. Major support is at 1.2150. Daily MACD is in sell zone, implying an important top at 1.2415. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is sideways in daily chart. Daily MACD  is in sell zone, implying important top at 1.4375 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading above 200 day major moving average. Important resistance is at 1.4375. Important support is at 1.3915 and later at 1.3715.      

USD/YEN: The pair is below major moving averages. Daily MACD is in buy zone, implying important bottom at 104.56. Important support is at 104.56. Important resistance is  at 108 and later at 110.40.