USDINR opened at 79.21 y’day and the pair traded in the 79.80-79.19 range. Spot USDINR closed at 79.47, gain of 31 ps for USD as against prior close of 79.16. 

RBI reference rate was fixed at 79.54 on 04/08. Aug USD/INR closed at 79.51, gain of 16 ps for USD as compared to prior day’s close of 79.35. Aug Euro/INR closed at 81.14, GBP/INR at 96.36 and Yen/INR at 59.35. USDINR fwd premia was trading at around 3.08% 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 closed flat y’day (0%) y’day. DOW declined 85 points (0.26%). Nikkei climbed 0.53% and Hang Seng climbed 0.40%.

Euro is now at 1.0233, Pound at 1.2140, Yen at 133.14.

Commodities: Gold is now at USD 1808 and WT1Crude at USD 88/Brent at USD 94.

Interest rates: USD 10 Yr yield is at 2.68% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.22%.

Economic news: Rupee declined steeply to 79.80 as China escalated war tensions over Taiwan. However, it reversed from 79.80 on RBI intervention and on softening reports from China. RBI rate decision and US employment data are important events for the day.

BOE hiked rates by 50 bps, but indicated that the economy will enter into a prolonged recession. GDP growth is expected to slow further from Q2’s 0.5% to 0.2% in Q3, and then decline by nearly -1% in Q4. GDP is also forecast to fall further, by -1.50% in 2023, and then -0.25% in 2024.

Data highlights: – US Weekly jobless claims was reported at 260k.

-German Factory orders declined -0.4% m/m.

Friday’s calendar : US nonfarm payrolls

-German 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 79.61. 50 day moving average is at 78.77.200 day moving average is at 76.23. Daily MACD is in sell zone. Important supports are at 78.50 and important resistances are at 79.38/79.50. Spot closed below its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 79.61, S1:79.24, S2:79, R1:79.85, R2:80.22.             

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 79.70 levels. Nearby imports can be hedged at 78.85/78.50.

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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