04 May 2022
Forex Insights
USD/INR Spot reference {76.40}:
Monday, USD/INR had a gap up opening tracking negative sentiment in Asian equities at 76.5000 levels against Friday close of 76.4250. The pair traded with appreciative bias throughout the day due to IPO based foreign fund dollar inflows. USD/INR swung both sides and made a low of 76.3475 and high of 75.5150 before closing at 76.5150 areas.
Broad Market Snapshot:
The FED is due to announce its interest rate decision today (11:30 p.m. IST) and is broadly expected to hike rates by 50 basis points. This would be the largest rate hike in 20 years. Equally as important as the interest rate hikes, the FOMC is expected to announce a reduction in bond holdings, and the pace of the balance sheet normalization will be also closely watched.
Financial markets will be more focused on what comes next? Any fears in the market that the FED will be hiking rates too quickly will spark negative movement in risky asset classes.
USD/INR Price Action and Technicals:
The upside momentum since the last few days appears to be losing strength. Rise above 76.6000 could restore the strength for rising further towards 76.7500 levels. Cluster of strong supports bunched together in the 76.2950-76.3450 region. Intraday resistance near 76.5500 is expected to cap upticks. Staying below 76.4000 would increase the chance to drift downward towards next support at 76.1950 then 76.0950 area.
Range for the day: 76.1950 to 76.5500
Equity Insights
Indian Equity
Benchmark indices are trading mixed in the pre-opening session.
At 09:02 IST, the Sensex was up 49.22 points or 0.09% at 57025.21, and the Nifty was down 53.30 points or 0.31% at 17015.80.
On May 2, the Indian market began the holiday-shortened week on a low note due to sluggish global markets, but late-hour buying helped the benchmarks recover their losses and end flat.
The Sensex was down 84.88 points, or 0.15 percent, at 56,975.99 at the closing, while the Nifty was down 33.40 points, or 0.2%, at 17,069.10.
The Nifty has immediate support and resistance at 16,800 and 17,200, respectively.
Other Equity
In early Wednesday trade, Asian stocks were divided, with investors anticipating the Federal Reserve’s interest rate decision later in the day in the United States.
The Hang Seng index in Hong Kong fell 0.68 percent as shares of Tencent and Alibaba both fell about 2%.
In other markets, South Korea’s Kospi climbed 0.1 percent, while Australia’s S&P/ASX 200 gained 0.19 percent.
Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks was slightly changed.
Commodity Insights
OIL
Oil prices jumped at the start of Asian trading on Wednesday, despite fears about slowing demand from top importer China, after industry reports revealed drawdowns in U.S. crude and fuel stockpiles, heightening supply concerns and offsetting concerns about slowing demand from China.
Brent crude futures had risen 89 cents, or 0.9 percent, to $105.86 a barrel. The price of West Texas Intermediate crude futures increased by 97 cents, or 1%, to $103.38 a barrel.
Economic Events
Economic Calendar | ||||
Wednesday, May 04, 2022 | ||||
Time | Country | Event | Forecast | Previous |
17:45 | USD | ADP Nonfarm Employment Change (Apr) | 395K | 455K |
19:30 | USD | ISM Non-Manufacturing PMI (Apr) | 58.5 | 58.3 |
20:00 | USD | Crude Oil Inventories | -0.829M | 0.692M |
23:30 | USD | Fed Interest Rate Decision | 1.00% | 0.50% |
23:30 | USD | FOMC Statement | ||
Disclaimer: All information in this report is collected from various sites on the internet. Although we have taken all precautions for the correct representation of data however we do not take any responsibility for any errors and omissions. The technical analysis and views expressed are the author’s own views. We are not responsible for any losses on account of following the same.
Sources
