FX Insights
USD/INR Spot reference {77.75}:
Friday, USD/INR had a slight gap down opening at 77.3400 levels tacking improved sentiment in global equities against the previous day close of 77.4150.During the day we saw importers covering below 77.3000 levels however in the first session the pair were trading both ways in a very tight range of 12 paisa only. In the last one hour the pair abruptly went up to 77.47 areas due to reversal of all gains in the domestic equity market and fall in EUR/USD. The pair finally closed near day high at 77.45 levels.
Broad Market Snapshot:
Last week US CPI data print was stronger than expected, it stroked inflation fears in the US and led to extreme volatility across all asset classes. Markets should find out more hints this week as FED Chairman Jerome Powell speaks on Tuesday regarding inflation.
Goldman Sachs cut its US growth forecast to 2.40 % from 2.60% this year and said that the chance of recession in the US is getting ‘very very high’. This week the focus turns to Retail Sales data from China, US and the UK.
Oil prices are trading flat as lockdowns in China and weak Chinese data fuel fears of a global recession, overshadowing the news that the EU is moving a step closer to banning Russian Oil.
USD/INR Price Action and Technicals:
We may also see dollar inflows after the long weekend today. Short-term charts show a mildly bearish tilt, hinting that the price would be inclined to drift down towards 77.5850 then 77.4050 area. Below 77.40 areas might caution about the possibility of a slightly stronger correction in the pair towards 77.20 again. Next important resistance is near 77.8050. Unexpected rise above 77.8050 could hint at the possibility of extending the rise towards nearby resistance levels around 77.9800.Daily Chart pattern shows that the uptrend is slowing down.
Range for the day: 77.4050 to 77.8050
Equity Insights
Indian Equity
The market is projected to begin in the green, as the wider index in India is projected to open with a gain of 42 points, based on SGX Nifty trends.
The BSE Sensex climbed 180 points to 52,974 after losing more than 5% in six straight sessions, while the Nifty50 advanced 60 points to 15,842 and created a Doji candlestick pattern on daily charts, signifying indecisiveness among bulls and bears.
The pivot charts show that the Nifty’s important support level is 15,729, followed by 15,615. The major resistance levels to monitor if the index rises are 15,967 and 16,092.
Other Equity
In Tuesday morning trade, Asian stocks were neutral, with investors anticipating the release of Reserve Bank of Australia meeting minutes.
In early trade, Japan’s Nikkei 225 index fell 0.13 percent, while the Topix index remained above the flatline. The Kospi in South Korea rose 0.46 percent, while the S&P/ASX 200 in Australia gained 0.15 percent.
Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks rose 0.25 percent.
Commodity Insights
OIL
Oil traded near the highest close in almost eight weeks on strength in products markets, with US gasoline at unprecedented levels.With only a few weeks until the start of the summer driving season in the United States, gasoline prices have risen to new highs due to increased demand and limited refining capacity.
Oil prices have risen more than 50% this year in very turbulent trading as the European conflict constricted supply and demand outside of virus-ravaged China increased.
Brent crude prices were down 35 cents, or 0.3 percent, to $113.89 a barrel, while WTI crude futures were down 52 cents, or 0.5 percent, to $113.68 a barrel.
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| Economic Calendar |
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| Tuesday, May 17, 2022 |
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Time | Country | Event | Forecast | Previous |
07:00 | AUD | RBA Meeting Minutes |
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11:30 | GBP | Claimant Count Change (Apr) | -42.5K | -46.9K |
11:30 | GBP | Average Earnings Index +Bonus (Mar) | 5.4% | 5.4% |
18:00 | USD | Retail Sales (MoM) (Apr) | 0.9% | 0.7% |
18:00 | USD | Core Retail Sales (MoM) (Apr) | 0.4% | 1.4% |
22:30 | EUR | ECB President Lagarde Speaks |
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23:30 | USD | Fed Chair Powell Speaks |
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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.
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