FX MORNING UPDATE 

USDINR opened at 80.01 y”day and the pair traded in the 79.92-80.06 range. Spot USDINR closed at 79.95, loss of 3 ps for USD as against prior close of 79.98. RBI reference rate was fixed at 79.97 on 21/07July USD/INR closed at 79.94, loss of 15 ps for USD as compared to prior day’s close of 80.09. June Euro/INR closed at 81.50, GBP/INR at 95.50 and Yen/INR at 57.70. USDINR fwd premia was trading at around 3.12% p.a.  FX reserves stands at USD 580 bn as on July 15 th.

PAIRSRBI REF RATE (21/07)
USDINR79.97
EURINR81.68
GBPINR95.93
JPYINR57.84

In 2022-23 fiscal, FII’S have sold 163515 Cr of Equities in Cash segment till date 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 climbed 84 points (0.51%) y’day. DOW climbed 162 points (0.51%). Nikkei climbed 0.44% and Hang Seng declined 1.51%.

Euro closed at 1.02, Pound at 1.1982, Yen at 137.38.

Commodities: Gold is now at USD 1716 and WT1Crude at USD 96/Brent at USD 104.

Interest rates: USD 10 Yr yield is at 2.89% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.45%.

Economic news: ECB raised interest rate by 50bps, and front-loads the exit from negative deposit rate. The central bank also maintains tightening bias. The “larger first step” in policy normalization was based on the “updated assessment of inflation risks and the reinforced support provided by the TPI for the effective transmission of monetary policy.” The “frontloading” of exit from negative deposit rate ” allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions.” Future policy path will continue to be “data-dependent”. At the post meeting press conference, President Christine Lagarde said that inflation continues to be “undesirably high” and is expected to remain above target for some time. While latest data indicate a slowdown in growth, this slowdown is “being cushioned by a number of supportive factors”.

Data highlights: – – US Weekly jobless claims climbed to 251k.

Friday’s calendar :  – EU PMI(mfrg) and PMI(services)

-UK PMI(mfrg) and PMI(services)

USD/INR   80.0679.92
EUR/USD      1.021.02771.0154
GBP/USD      1.19821.20101.1890
USD/JPY      137.38138.88137.04

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.02171.02801.03401.04031.01571.00901.0034
GBP/USD1.19651.20401.20851.21591.19201.18451.1801
USD/JPY137.66138.28139.51140.13136.44135.81134.59
USD/INR79.9780.0380.11 79.8879.83 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD0.99351.0240/1.0350DNSIDE>1.05
GBP/USD1.17501.2160/1.24DNSIDE>1.2410
USD/JPY136/134.35140.50UPSIDE<136
USD/INR79.77/79.3580.25UPSIDE<78.80
USD/CHF0.94601.0053UPDN<0.9460

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 79.34. 50 day moving average is at 78.38.200 day moving average is at 75.93. 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 below its average level of the day.

Intraday supports and resistances for July contract are:

PP: 80, S1:79.89 S2:79.71, R1:80.18, R2:80.29.             

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 80+ 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 buy zone, implying important bottom at 134.75. Important support is at 136/134.35. Major resistance is at 140.50.

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