USDINR opened at 79.67 y’day and the pair traded in the 79.67-79.91 range. Spot USDINR closed at 79.87, gain of 24 ps for USD as against prior close of 79.63. RBI reference rate was fixed at 79.87 on 14/07. July USD/INR closed at 80.10, gain of 38 ps for USD as compared to prior day’s close of 79.72. June Euro/INR closed at 80.27, GBP/INR at 94.70 and Yen/INR at 57.71. USDINR fwd premia was trading at around 2.90% p.a.  FX reserves stands at USD 588 bn as on July 1 st.

In 2022-23 fiscal, FII’S have sold 98014 Cr of Equities till June end and have sold Rs 8486 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 28 points (0.18%) y’day. DOW declined 142 points (0.46%). Nikkei climbed 0.62% and Hang Seng declined 0.22%.

Euro closed at 1.0023, Pound at 1.1833, Yen at 138.85.

Commodities: Gold is now at USD 1710 and WT1Crude at USD 96/Brent at USD 99.

Interest rates: USD 10 Yr yield is at 2.95% and 3 m libor closed at 2.48%. Indian 10 yr benchmark yield closed at 7.34%.

Economic news: WPI inflation climbed 15.18% in June. This is the 15 th consecutive month of double digit data. Indian exports climbed 23.52% y/y to USD 40.13 bn. Imports climbed 57.55% to USD 66.31 bn. Trade deficit expanded to USD 26.18 bn. Apr-June exports climbed 24.51% to USD 118.96 bn. Imports in Apr-June climbed 49.47% to USD 189.75 bn.

European Commission downgraded both 2022 and 2023 Eurozone GDP growth projections. GDP is expected to climb 2.6% in 2022 and 1.4% in 2023. Inflation is expected to be at 7.6% in 2022 and 4% in 2023.

Fed officials cooled markets by dispelling thoughts on 100 bps rate hike in July.

Data highlights: – – US Weekly jobless claims climbed to 244k and PPI climbed 1.1% m/m.

Friday’s calendar :  – US retail sales and industrial production.

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 78.89. 50 day moving average is at 78.10.200 day moving average is at 75.78. Daily MACD is in buy zone. Important supports are at 79.35/79.10/78.85 and important resistance is at 80.25. Spot closed above its average level of the day.

Intraday supports and resistances for July contract are:

PP: 79.87, S1:79.61, S2:79.48, R1:80, R2:80.26.             

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 79.90+ levels. Nearby imports can be hedged at 79.35/79.10.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0350/1.05. Next major support is at 0.9935. Daily MACD is in sell zone, implying an important top at 1.0625. 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 1.2410 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.1750. Important resistance is at 1.2160/1.24.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 137. Important support is at 134.35/131.35. Major resistance is at 137.

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