USDINR opened at 77.77 on Friday and the pair traded in the 77.77-77.87 range. Spot USDINR closed at 77.84, gain of 8 ps for USD as against prior close of 77.76. RBI reference rate was fixed at 77.84 on 10/06. June USD/INR closed at 77.97, gain of 9 ps for USD as compared to prior day’s close of 77.88. June Euro/INR closed at 82.64, GBP/INR at 97.02 and Yen/INR at 58.34. USDINR fwd premia was trading at around 3.7% p.a. FX reserves stands at USD 601.1 bn.
| PAIRS | RBI REF RATE (10/06) |
| USDINR | 77.84 |
| EURINR | 82.68 |
| GBPINR | 97.23 |
| JPYINR | 58.14 |
Benchmark Nifty declined 276 points (1.68%) on Friday. DOW declined 880 points. (2.73%).Nikkei declined 1.49% and Hang Seng declined 0.29%.
Euro closed the week at 1.0517, Pound at 1.2313, Yen at 134.40.
Commodities: Gold is now at USD 1875 and WT1Crude at USD 120.47/Brent at USD 122.
Interest rates: USD 10 Yr yield is at 3.16% and 3 m libor closed at 1.74%. Indian 10 yr benchmark yield closed at 7.51%.
Economic news: US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. That will likely push the Federal Reserve to extend an aggressive series of interest-rate hikes CPI climbed 8.6% y/y and 1% m/m.
ECB member said that inflation is “not only too high but also too broad”. The ECB will purse a “gradual but sustained” rate hikes until reaching neutral range. He estimated that it’s “somewhere between 1% and 2%”.
Focus will be on US FOMC meeting and UK MPC decision on rates and forward guidance.
Data highlights: – US CPI climbed 8.6% y/y.
Monday’s calendar : UK industrial and manufacturing production, GDP
| USD/INR | 77.87 | 77.77 | ||
| EUR/USD | 1.0517 | 1.0642 | 1.0506 | |
| GBP/USD | 1.2313 | 1.2517 | 1.2301 | |
| USD/JPY | 134.40 | 134.49 | 133.47 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0555 | 1.0604 | 1.0691 | 1.0468 | 1.0419 | ||
| GBP/USD | 1.2377 | 1.2453 | 1.2593 | 1.2237 | 1.2161 | ||
| USD/JPY | 134.12 | 134.77 | 135.14 | 133.75 | 133.10 | ||
| USD/INR | 77.82 | 77.88 | 77.93 | 77.77 | 77.71 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.0340 | 1.0790 | DN | UP<1.0790 |
| GBP/USD | 1.2165 | 1.2660/1.28 | DN | SIDE>1.2660 |
| USD/JPY | 131.35 | 136.25 | UP | SIDE<131.35 |
| USD/INR | 77.48/77.27/77.15 | 78.20 | UP | SIDE<77.48 |
| USD/CHF | 0.9550 | 1.0066 | UP | DN<0.9550 |
Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 77.61. 50 day moving average is at 76.85.200 day moving average is at 75.30. Daily MACD is in sell zone. Important supports are at 77.48/77.27/77.15 and important resistance is at 78.20. Spot closed above its average level of the day.
Intraday supports and resistances for June contract are:
PP: 77.84, S1:77.76, S2:77.64, R1:77.96, 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 partially hedged at 78+ levels.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0790. Next major support is at 1.0350. Daily MACD is in sell zone, implying an important top at 1.0790. 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 sell zone, implying important top at 1.2660 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2165. Important resistance is at 1.2660/1.28.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 126.30. Important support is at 126.30/125. Major resistance is at 131.30.
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