USDINR opened at 79.17 y’day and the pair traded in the 79-79.22 range. Spot USDINR closed at 79.02, loss of 26 ps for USD as against prior close of 79.26. 

RBI reference rate was fixed at 79.17 on 01/08. Aug USD/INR closed at 79.28, loss of 19 ps for USD as compared to prior day’s close of 79.47. Aug Euro/INR closed at 81.37, GBP/INR at 96.98 and Yen/INR at 60.03. USDINR fwd premia was trading at around 3.18% p.a.  FX reserves stands at USD 571 bn as on July 29 th.

In July till date FII’S have net sold Rs 1200 Cr of Equities in Cash segment and have sold Rs 1130 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 2.02 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 181 points (1.06%) y’day. DOW declined 46 points (0.14%). Nikkei climbed 0.69% and Hang Seng climbed 0.05%.

Euro is now at 1.0275, Pound at 1.2262, Yen at 130.81.

Commodities: Gold is now at USD 1795 and WT1Crude at USD 93.40/Brent at USD 99.40.

Interest rates: USD 10 Yr yield is at 2.53% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.28%.

Economic news: GST Collections in July was reported at 1,48,995 Cr, second highest since launch. GST Collections have been above 1.4 lac for the last 5 months. Better compliance and economic recovery are contributing to robust GST collections.

Indian PMI for July was reported at 56.4 vs 53.9 in June. RBI meeting is the focus event in domestic market.

US 10 Year yield declined further on recessionary fears. Oil prices declined ahead of OPEC meeting.

Data highlights: – – US ISM(mfrg) climbed to 52.8 and construction spending declined -1.1% m/m.

-EU unemployment rate was reported at 6.6%, PMI(mfrg-final) is in contraction mode at 49.8 and German retail sales declined -1.6% m/m.

-UK PMI Manufacturing was finalized at 52.1 in July, down from 52.8 in June. That’s also the lowest level in 25 months.

Tuesday’s calendar : No major data release.

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 79.63. 50 day moving average is at 78.67.200 day moving average is at 76.23. Daily MACD is in sell zone. Important supports are at 78.85 and important resistances are at 79.38/79.70. Spot closed below its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 79.30, S1:79.17, S2:79.06, R1:79.41, R2:79.54.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR Exports can be hedged near 79.50 levels. 

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0270/1.0450. 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 1.2040/1.1890. Important resistance is at 1.2245/1.2450.

USD/YEN: The pair is below 50 moving average, but above 200 day moving average. Daily MACD is in sell zone, implying important top at 139.40. Important support is at 131.50/130. Major resistance is at 139.40 with intermediate resistances at 135.50/137.50.

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