USDINR opened gap up at 81.49 y’day and the pair traded in the 81.30-81.64 range. Spot USDINR closed at 81.57, loss of 5 ps for USD as against prior close of 81.62.

RBI reference rate was fixed at 81.37 on 27/09. Sep USD/INR closed at 81.55, loss of 16 ps for USD as compared to prior day’s close of 81.71. Sep Euro/INR closed at 78.59, GBP/INR at 88.16 and Yen/INR at 56.49. USDINR fwd premia was trading at around 2.70% p.a.  FX reserves stands at USD 545 bn as on Sep 16 th. FX reserves further declined by USD 5 bn, compared to prior week.

In Sep till date FII’S have net bought Rs 4378 Cr of Equities in Cash segment and have bought Rs 5912 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.47 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 declined 125 points (-0.43%). DOW declined 329 points (-1.11%). Nikkei climbed 0.53% and Hang Seng climbed 0.03%.

Euro closed the week at 0.9571, Pound at 1.0691, Yen at 144.69.

Commodities: Gold is now at USD 1637 and WT1Crude at USD 78/Brent at USD 84.50.

Interest rates: USD 10 Yr yield is at 3.96% and 3 m libor closed at 3.62%. Indian 10 yr benchmark yield closed at 7.30%.

Economic news: Rupee consolidated between 81.30 and 81.60. Rupee movement hinges on USD Index move. With Euro and sterling under pressure, Rupee is trading with weakening bias.

USD continued to climb on better than expected economic data. Consumer confidence rose and new home sales was also higher than previous data. Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices.

RBI’S meeting on Friday could see rate hike by 40 bps.

Data highlights: – US Durables order declined -0.2% m/m, new home sales climbed to 685k, consumer confidence rose to 108 and house price index is up 16.1% y/y.

Wednesday’s calendar : US pending home sales

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 79.98. 50 day moving average is at 79.79.200 day moving average is at 77.10. Daily MACD is in buy zone. Important supports are at 81.24/80.78 and important resistance is at 81.65. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 81.50, S1:81.33, S2:81.12, R1:81.71, R2:81.88.             

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

However on directional basis, suggest the following:

USDINR imports be hedged at 81.24/80.80.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 0.9860/1.02. Next major support is at 0.96. Daily MACD is in sell zone, implying an important top at 1.02. 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 1.1740 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.07. Important resistance is at 1.14.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 145. Important support is at 140.50/137.50. Major resistance is at 145.

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