USDINR opened at 82.27 on Friday and the pair traded in the 82.15-82.42 range. Spot USDINR closed at 82.36, gain of 1 ps for USD as against prior close of 82.35. Rupee is consolidating below 82.67 and could trade between 81.95 and 82.70. Fx reserves increased marginally by USD 204 mn. Fwd premia in USDINR pai declined due to RBI’S buy/sell swap to manage liquidity.

RBI reference rate was fixed at 82.38 on 14/10. Oct USD/INR closed at 82.35, loss of 7 ps for USD as compared to prior day’s close of 82.42. Oct Euro/INR closed at 80.26, GBP/INR at 92.57 and Yen/INR at 55.90. USDINR fwd premia was trading at around 2.58% p.a.  FX reserves stands at USD 532.87 bn as on Oct 14 th.

In Oct, FII’S have sold Rs 9135 Cr of Equities and have bought Rs 481 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.55 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 171 points (1.01%) on Friday. DOW declined 403 points (1.34%). Nikkei climbed 3.25% and Hang Seng climbed 1.21%.

Euro closed at 0.9721, Pound at 1.1179, Yen at 148.75.

Commodities: Gold is now at USD 1650 and WT1Crude at USD 85.50/Brent at USD 91.45.

Interest rates: USD 10 Yr yield is at 4.02% and 3 m libor closed at 4.19%. Indian 10 yr benchmark yield closed at 7.47%.

Economic news: USD/JPY climbed to 148.75, even though there is threat of intervention. Rally in USD Yield to 4%+ and chances of two more 75 bps rate hike by Fed drove USD higher against Yen. FOMC minutes highlighted policymakers’ concern on persistent inflation, and the cost of doing too little. Fed fund futures are now pricing in 97.2% chance of 75bps hike to 3.75-4.00%. US indices did a u-turn on Thursday, only to give up corrective gains. Crude also declined on Friday.

Sterling is recovering on reports that UK PM is likely to retreat further on the mini budget. With new Chancellor appointed, UK Govt is likely to present new proposals by Oct end.

Data highlights: – US retail sales was flat m/m. Core retail sales climbed 0.1% m/m.

Friday’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 81.42. 50 day moving average is at 80.32.200 day moving average is at 77.56. Daily MACD is in buy zone. Important support is at 81.94 and important resistance is at 82.70/83.35. Spot closed above its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 82.35, S1:82.18, S2:82.02, R1:82.51, R2:82.68.             

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 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 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 1.1490/1.18.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 140.40. Important support is at 145.90/140.40. Major resistance is at 151.

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