FX MORNING UPDATE

USDINR opened gap up 82.16 on Friday and the pair traded in the 82.16-82.43 range. Spot USDINR closed at 82.33, gain of 44 ps for USD as against prior close of 81.89. Rupee declined steeply on defense related payments, stop loss order trigger and rise in Crude prices. RBI did not actively intervene in FX market.

RBI reference rate was fixed at 82.40 on 07/10Oct USD/INR closed at 82.41, gain of 2 ps for USD as compared to prior day’s close of 82.39. Oct Euro/INR closed at 80.81, GBP/INR at 92.30 and Yen/INR at 57. USDINR fwd premia was trading at around 2.78% p.a.  FX reserves stands at USD 532 bn as on Sep 30 th. FX reserves further declined by USD 4.4 bn, compared to prior week.

PAIRSRBI REF RATE (07/10)
USDINR82.40
EURINR80.54
GBPINR91.69
JPYINR56.82

In Oct, FII’S have bought Rs 3213 Cr of Equities and have sold Rs 389 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.46 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 17 points (-0.10%) on Friday. DOW declined 630 points (-2.11%). Nikkei declined -0.71% and Hang Seng declined -1.51%.

Euro closed the week at 0.9741, Pound at 1.1084, Yen at 145.33.

Commodities: Gold is now at USD 1701 and WT1Crude at USD 93.20/Brent at USD 98.45.

Interest rates: USD 10 Yr yield is at 3.88% and 3 m libor closed at 3.90%. Indian 10 yr benchmark yield closed at 7.46%.

Economic news: US non-farm payroll employment grew 263k in September, just slightly below expectation of 265k. Monthly job growth has averaged 420k in 2022, compared with 562k in 2021.Unemployment rate dropped from 3.7% to 3.5%, below expectation of 3.7%. Labor force participation rate dropped from 62.4% to 62.3%. Average hourly earnings rose 0.3% mom, matched expectations.

Strong labor data gives a greenlight for next round of 75 bps rate hike by Fed. USD index climbed post Fed meeting.

Data highlights: – German industrial production declined -0.8% m/m.

Monday’s calendar : – EU sentix investor confidence survey.

USD/INR   82.4382.16
EUR/USD       0.97410.98180.9725
GBP/USD       1.10841.12271.1055
USD/JPY       145.33145.46144.71

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD0.97610.97970.9854 0.97040.9668 
GBP/USD1.11221.11891.1294 1.10171.0950 
USD/JPY145.16145.62 145.91 144.86 144.41 
USD/INR82.3082.4582.58 82.1782.02 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD0.95401.00DNSIDE>1.00
GBP/USD1.041.1490DNSIDE>1.1490
USD/JPY140.40145.90UPSIDE<140.40
USD/INR81.9583.35UPSIDE<81.90
USD/CHF0.9740/0.94751.0060SIDEDN<0.9475

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 80.70. 50 day moving average is at 80.06.200 day moving average is at 77.40. Daily MACD is in buy zone. Important support is at 81.94 and important resistance is at 83.35. Spot closed above its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 82.43, S1:82.28, S2:82.17, R1:82.55, R2:82.69.             

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

However on directional basis, suggest the following:

USDINR imports be hedged at 81.90.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.00. Next major support is at 0.9540. Daily MACD is in buy zone, implying an important bottom at 0.9540. 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 1.0380 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.0380. Important resistance is at 1.1490.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 145.90. Important support is at 140.50/137.50. Major resistance is at 145.90.

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