Forex Insights
USD/INR Spot reference {76.15}:
Yesterday, USD/INR had a gap down opening at 76.4600 levels against Monday’s close of 76.5100. After opening the pair came down near 76.40 levels where buying emerged and gradually the pair went up to 76.5750 levels tracking negative sentiment in the equity market. We saw selling interest due to IPO based foreign dollar inflows throughout the day. During RBI announcement of Repo (40 bps) rate CRR (50 bps) hike the pair was very volatile and made a low of 76.2000 before closing at 76.4150 levels.
Broad Market Snapshot:
The FED hiked a rare 50 bps interest rate but sounded less hawkish than market expectation. They also announced plans to shrink its USD 9 trillion asset portfolio starting next month in a double-barreled effort to combat inflation that is running at a four-decade high. FED chairman Jerome Powell told reporters that a 75-basis-point interest rate increase is not something that the FED committee is actively considering in the near future.
USD/INR Price Action and Technicals:
The expected decline was sharper than anticipated and it hints that it could extend towards 76.0950 and 76.00 levels. Short-term recovery could be capped near the 76.35-40 resistance zone area to keep alive the chances for next decline below 76.00 levels. While staying below 76.2500 it would remain vulnerable for a break below 76.00, strengthening the chances for further fall towards 75.60 levels.
Range for the day: 76.00 to 76.3500
Equity Insights
Indian Equity
The Indian stock market is expected to begin in the green, with SGX Nifty trends indicating a 155-point gap-up opening for the wider index in India.
The BSE Sensex dropped almost 1,300 points to 55,669, while the Nifty50 fell about 400 points to 16,678, forming a Long Black Day pattern on the daily charts after decisively breaking important support levels of 16,800-16,900.
The pivot charts show that the Nifty’s main support level is 16,490, followed by 16,303. The important resistance levels to monitor if the index rises are 16,999 and 17,320.
Other Equity
On Thursday, Asian stocks followed Wall Street’s advances as the Federal Reserve boosted interest rates by 50 basis points but struck a less aggressive tone than some had expected, boosting investor confidence and sending the currency down.
With growing COVID-19 cases and a severe lockdown in the financial capital of Shanghai impacting on morale, China’s stocks withstood the overall advance.
The S&P/ASX 200 index in Australia also did well, rising 0.61 percent.
The Federal Reserve raised interest rates by half a percentage point, the largest rise in 22 years. At upcoming policy meetings in June and July, Fed Chair Jerome Powell said policymakers were prepared to approve rate hikes of comparable magnitude.
Commodity Insights
OIL
Oil prices moved up on Thursday, extending gains from the previous session, as concerns over Chinese demand were tempered by a European Union plan for more sanctions against Russia, including a crude embargo in six months.
Brent crude prices were up 35 cents, or 0.3 percent, to $110.49 per barrel, while WTI crude futures were up 25 cents, or 0.2 percent, to $108.06 per barrel.
After rising more than $5 a barrel on Wednesday, both benchmarks rose more than $1 a barrel earlier in the tumultuous session.
| Economic Calendar | ||||
| Thursday, May 05, 2022 | ||||
| Time | Country | Event | Forecast | Previous |
| 14:00 | GBP | Services PMI (Apr) | 58.3 | 58.3 |
| 14:00 | GBP | Composite PMI (Apr) | 57.6 | 57.6 |
| 16:30 | GBP | BoE MPC Meeting Minutes | ||
| 16:30 | GBP | BoE Interest Rate Decision (May) | 1.00% | 0.75% |
| 16:30 | GBP | BoE Inflation Report | ||
| 18:00 | USD | Initial Jobless Claims | 182K | 180K |
| 18:45 | GBP | BoE Gov Bailey Speaks | ||
[convertkit form=3104091]
[email-subscribers-form id=”2″]
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
