USDINR opened gap down at 82.12 y’day and the pair traded in the 82.12-82.50 range. Spot USDINR closed at 82.50, loss of 23 ps for USD as against prior close of 82.73.
RBI reference rate was fixed at 82.38 on 27/10. Nov USD/INR closed at 82.65, loss of 43 ps for USD as compared to prior day’s close of 83.07. Nov Euro/INR closed at 83.15, GBP/INR at 95.66 and Yen/INR at 56.65. USDINR fwd premia was trading at around 2.35% p.a. FX reserves stands at USD 528.36 bn as on Oct 14 th. FX reserves declined by USD 4.5 bn as compared to previous fortnight.
| PAIRS | RBI REF RATE (27/10) |
| USDINR | 82.38 |
| EURINR | 82.90 |
| GBPINR | 95.62 |
| JPYINR | 56.57 |
Benchmark Nifty climbed 80 points (0.46%) y’day. DOW climbed 194 points (0.61%). Nikkei declined 0.32% and Hang Seng climbed 0.72%.
Euro is now at 0.9958, Pound at 1.1547, Yen at 146.38.
Commodities: Gold is now at USD 1664 and WT1Crude at USD 88.60/Brent at USD 94.65.
Interest rates: USD 10 Yr yield is at 3.93% and 3 m libor closed at 4.24%. Indian 10 yr benchmark yield closed at 7.41%.
Economic news: ECB hiked rates by 75 bps , but ECB Chief refrained from further hawkish stance. The central bank also maintains tightening bias, and said, it “expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target. ”Future policy rate path will be based on the “evolving outlook for inflation and the economy”, and follow its “meeting-by-meeting approach. ECB members said that activity has slowed significantly in Q3 and further deterioration is expected. Three members only wanted 50 bps rate hike.
US GDP grew at annualized rate of 2.6% in Q3, above expectation of 2.4%. PCE price index growth slowed from 9.0% to 4.1%, below expectation of 5.4%.
Fed’s Nov meeting forward guidance will be watched closely as to whether major Central banks would slow down rate tightening, having loaded rate hikes heavily in 2022. With some pull back in commodity prices, Central banks would like to gauge the impact of 2022 rate hikes.
Data highlights: – US Weekly jobless claims dipped to 217k, Durables order climbed 0.4% m/m, GDP(advance) climbed 2.6% q/q.
Friday’s calendar : – US Personal income, spending, pending home sales
| USD/INR | 82.50 | 82.12 | ||
| EUR/USD | 0.9958 | 1.0093 | 0.9958 | |
| GBP/USD | 1.1547 | 1.1646 | 1.1550 | |
| USD/JPY | 146.38 | 146.93 | 145.12 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0006 | 1.0054 | 1.0141 | 1.0189 | 0.9919 | 0.9871 | 0.9785 |
| GBP/USD | 1.1587 | 1.1624 | 1.1683 | 1.1721 | 1.1528 | 1.1491 | 1.1431 |
| USD/JPY | 146.11 | 147.10 | 147.93 | 148.92 | 145.29 | 144.29 | 143.47 |
| USD/INR | 82.37 | 82.62 | 82.75 | 82.24 | 81.99 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.00/0.9845 | 1.01/1.02 | SIDE | DN<0.9840 |
| GBP/USD | 1.1440 | 1.1740 | UP | DN<1.1440 |
| USD/JPY | 144/140.40 | 152 | UP | SIDE<144 |
| USD/INR | 81.95 | 82.40/82.65 | UP | SIDE<82.03 |
| USD/CHF | 0.98/0.97 | 0.9945/1.0060 | SIDE | UP>0.9945 |
Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 82.17. 50 day moving average is at 80.80.200 day moving average is at 77.74. Daily MACD is in buy zone. Important support is at 82.03/81.95/81.70 and important resistance is at 82.67/83.30. Spot closed above its average level of the day.
Intraday supports and resistances for Nov contract are:
PP: 82.58, S1:82.41, S2:82.17, R1:82.82, R2:82.99.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR imports be hedged .
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50 and 20 day major moving averages. Major resistance is at 1.01/1.02. Next major support is at 0.9845. 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 20 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.0380 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1440. Important resistance is at 1.1740.
USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 152. Important support is at 144/140.40. Major resistance is at 152.
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