31/08/2018                                                                        

USDINR opened at 70.62 y’day and the pair traded in the 70.59-70.84 range. Spot USDINR closed at 70.74, gain of 15 ps ps for USD as against prior close of 70.59.RBI reference rate was fixed at 70.50. Rupee has declined 11% from its high levels of 63.25 in this calendar year. Rupee decline was unabated as banks bought for defense related purchases. Month end Oil demand also contributed to steep decline. Rising Crude oil prices added to concern that deficit will widen even further. Sep USD/INR closed at 70.94, gain of 13 ps for USD as compared to prior day’s close of 70.81. Sep Euro/INR closed at 83, GBP/INR at 92.36 and Yen/INR at 63.63.

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 declined 0.13% y’day. DOW declined 137 points (0.53%) y’day. Nikkei climbed 0.09% and Hang seng declined 0.89 % y’day.

Euro is now at 1.1664, Pound at 1.3011,Yen at 110.97     

Commodities: Gold is now at USD 1208 and WT1Crude at USD 70.22.

Interest rates: USD 10 Yr yield is at 2.88% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.93%.        

Economic news: Global markets were again jittered by Chinese developments and steep decline in Turkish Currency. US President is reported to be considering escalating trade tariff on Chinese imports. US data matched expectations. EU Official said that EU is ready to drop tariffs on US industrial products and even reduce duty on autos to 0, if US takes reciprocal steps.

US President rejected the proposal as insufficient and added that EU trade policies are as worse as China.

Indian GDP data is in focus today.                                                                          

Data Highlights : – US Personal income climbed 0.3% m/m, spending was up 0.4% m/m, in line with consensus, Core PCE index climbed 0.2% m/m and weekly jobless claims dipped to 213k.

Friday’s calendar: -US Chicago PMI

-German retail sales

-Japanese unemployment rate and housing starts

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 69.45. 50 day moving average is at 68.94. 200 day moving average is at 66.10. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 70.30 and later at 69.52. Important resistance is at 71.40. Spot closed above its average level of the day.  

Intra day supports and resistances for Sep contract are:

PP: 70.92,S1:70.76, S2:70.59, R1:71.09, R2:71.25.                                                              

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.