USDINR opened at 79.13 on Friday and the pair traded in the 78.93-79.29 range. Spot USDINR closed at 79.24, loss of 23 ps for USD as against prior close of 79.47. 

RBI reference rate was fixed at 79.11 on 05/08. Aug USD/INR closed at 79.40, loss of 11 ps for USD as compared to prior day’s close of 79.51. Aug Euro/INR closed at 81.34, GBP/INR at 96.42 and Yen/INR at 59.71. USDINR fwd premia was trading at around 3.08% p.a.  FX reserves stands at USD 573.85 bn as on July 29 th.

In Aug till date FII’S have net bought Rs 10977 Cr of Equities in Cash segment and have bought Rs 289 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.84 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 15 points on Friday (0.15%) y’day. DOW climbed 76 points (0.23%). Nikkei climbed 0.87% and Hang Seng climbed 0.14%.

Euro is now at 1.0182, Pound at 1.2072, Yen at 134.99.

Commodities: Gold is now at USD 1792 and WT1Crude at USD 88.50/Brent at USD 94.65.

Interest rates: USD 10 Yr yield is at 2.82% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.30%.

Economic news: RBI hiked repo rates by 50 bps to 5.9%. GDP is maintained to climb at 7.2% and average annual inflation is expected to be 6.7% in 2022-23.

Rupee continued to remain volatile with swings on both sides.

US non-farm payroll employment grew strongly by 528k in July, well above expectation of 250k. That’s also much higher than the average gain of 388k over the prior 4 months. Total non-farm employment has also reached its pre-pandemic level.Unemployment rate dropped from 3.6% to 3.5%, better than expectation of 3.6%. Participation rate dropped -0.1% to 62.1%.Average hourly earnings rose 0.5% mom in July, above expectation of 0.3% mom.

US Yields moved higher and USD gained against majors.

Data highlights: – German industrial production climbed 0.4% m/m.

Monday’s calendar : EU sentix investor confidence

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 78.80.200 day moving average is at 76.33. Daily MACD is in sell zone. Important supports are at 78.85/78.50 and important resistances are at 79.38/79.80. Spot closed above its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 79.29, S1:79.14, S2:78.89, R1:79.54, R2:79.69.             

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 above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 139.40. Important support is at 130.50. Major resistance is at 139.40 with intermediate resistances at 135.50/137.50.

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