FX Insights
USD/INR Spot reference {77.54}:
Yesterday, USD/INR had a gap up opening at 77.6900 levels tacking higher dollar index and crude oil against the Friday close of 77.4500.After opening we saw the pair briefly went up to 77.7975 levels where selling emerged. Later in the afternoon session the pair was trading throughout the day with appreciative bias due to positive sentiment in equity and dollar weakness globally. We also heard chatter of PSU bank action near the 77.80 area. The pair finally closed near day low at 77.5650 levels.
Broad Market Snapshot:
Dow Jones closed higher (+1.34%) yesterday as risk sentiment improves and retail sales beat forecasts. US Retail sales rose 0.9% in April 2022.Investors who are worried about the effects that inflation will have on household spending can take a deep breath after the fourth straight month increase in retail sales data.
Yesterday FED Chair Jerome Powell said the US central bank will raise interest rates until there is evidence that inflation is coming down in a clear and convincing way. It’s a new week but the same old story for financial markets as global growth concerns and inflation fears leave global investors on edge.
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:
Staying below 77.65 would bring back the corrective scenario where the price is expected to dip towards 77.3850 areas with a chance to extend to 77.1950.Short term charts dominated by bearish trend and momentum indications, suggesting that the price could most probably go down further towards 77.0950. Strong resistance levels in the 77.65 region need to be cleared to extend the rally towards 77.8050 areas again. Next important resistance levels are spread between 77.98 & 78.10.
Range for the day: 77.2750 to 77.6550
Equity Insights
Indian Equity
The market opened 88 points up at 16337
On the daily charts, the BSE Sensex rose over 1,300 points to 54,318 and the Nifty50 rose over 400 points to 16,259, forming a strong bullish candle.
The pivot charts show that the Nifty’s important support level is 16,200, followed by 16,000. The important resistance levels to monitor if the index rises are 16,395 and 16,532.
Other Equity
Asia-Pacific stocks were mixed in Wednesday morning trade.
Japan’s economy shrank 1% annualized in January-March as compared with the previous quarter, government data showed Wednesday. That was less than the 1.8% contraction predicted in a poll, according to Reuters.
U.S. Fed Chair Jerome Powell said he will back interest rate increases till prices begin falling back toward a healthy level.
Elsewhere, mainland Chinese stocks slipped, with the Shanghai Composite down 0.15% while the Shenzhen Component dipped fractionally.
The Hang Seng index in Hong Kong also declined 0.42%
South Korea’s Kospi rose 0.1%. Australian stocks also saw gains as the S&P/ASX 200 climbed 0.8%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.33% higher.
Commodity Insights
OIL
In early Asian trade on Wednesday, oil prices jumped more than $1 a barrel on optimism of a revival in demand in China as the nation progressively eases some of its harsh COVID-19 control restrictions.
Brent crude futures were up $1.15, or 1%, at $113.08 a barrel, while West Texas Intermediate (WTI) crude futures were up $1.62, or 1.4 percent, at $114.02 a barrel, recouping some losses after oil prices plummeted by roughly 2% the previous day.
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| Economic Calendar |
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| Wednesday, May 18, 2022 |
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Time | Country | Event | Actual | Forecast | Previous |
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05:20 | JPY | GDP (QoQ) (Q1) | -0.2% | -0.4% | 1.1% |
11:30 | GBP | CPI (YoY) (Apr) |
| 9.1% | 7.0% |
14:30 | EUR | CPI (YoY) (Apr) |
| 7.5% | 7.5% |
18:00 | CAD | Core CPI (MoM) (Apr) |
| 0.4% | 1.0% |
18:00 | USD | Building Permits (Apr) |
| 1.812M | 1.870M |
20:00 | USD | Crude Oil Inventories |
| 1.383M | 8.487M |
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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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