USDINR opened at 79.89 on Friday and the pair traded in the 79.85-79.92 range. Spot USDINR closed at 79.85, loss of 10 ps for USD as against prior close of 79.95. RBI reference rate was fixed at 79.91 on 22/07. July USD/INR closed at 79.96, gain of 2 ps for USD as compared to prior day’s close of 79.94. June Euro/INR closed at 81.26, GBP/INR at 95.48 and Yen/INR at 58.31. USDINR fwd premia was trading at around 3.17% p.a.  FX reserves stands at USD 580 bn as on July 15 th.

In July till date FII’S have net bought Rs 1360 Cr of Equities in Cash segment and have bought Rs 977 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 2 lac Cr worth of Equities. 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 114 points (0.69%) y’day. DOW climbed 162 points (0.51%). Nikkei climbed 0.40% and Hang Seng climbed 0.17%.

Euro closed at 1.0213, Pound at 1.2004, Yen at 136.10.

Commodities: Gold is now at USD 1725 and WT1Crude at USD 95/Brent at USD 103.50.

Interest rates: USD 10 Yr yield is at 2.81% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.41%.

Economic news: Eurozone PMI Manufacturing dropped from 52.1 to 49.6 in July, below expectation of 51.0. That’s the lowest level in 25 months. PMI Services dropped from 53.0 to 50.6, below expectation of 52.0. That’s the lowest level in 15 months. PMI Composite Output dropped from 52.0 to 49.4, a 17-month low.

Chief Business Economist at S&P Global Market Intelligence said: “The eurozone economy looks set to contract in the third quarter as business activity slipped into decline in July and forward-looking indicators hint at worse to come in the months ahead…“Excluding pandemic lockdown months, July’s contraction is the first signalled by the PMI since June 2013, indicative of the economy contracting at a 0.1% quarterly rate. Although only modest at present, a steep loss of new orders, falling backlogs of work and gloomier business expectations all point to the rate of decline gathering further momentum as the summer progresses…

“With the ECB raising interest rates at a time when the demand environment is one that would normally see policy being loosened, higher borrowing costs will inevitably add to recession risks.”

UK PMI(mfrg) also declined to 24month lows.

Data highlights: – EU PMI(mfrg) declined to 49.6 and PMI(services) declined to 50.6.

-UK PMI(mfrg) was reported at 52.2 and PMI(services) climbed to 53.3.

Monday’s calendar :  – German Ifo survey.

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 79.41. 50 day moving average is at 78.43.200 day moving average is at 76.10. Daily MACD is in sell 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: 79.92, S1:79.88, S2:79.81, R1:80, R2:80.03.             

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 1.0350/1.0450. Next major support is at 0.9935. Daily MACD is in buy zone, implying an important bottom at 0.9935. 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 buy zone, implying important bottom at 1.1750 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.1750. Important resistance is at 1.2160/1.2230.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 139.40. Important support is at 134.35. Major resistance is at 139.40.

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