FX Market Insight
USD/INR Spot reference {77.54}:
Yesterday, USD/INR had a gap up opening at 77.5600 against the previous day close of 77.5150. After opening USDINR initially came down to 77.5275 areas and was trading almost flat in first hour trading. Later in the afternoon session the pair gradually started moving higher due to buying interest in fixing and negative sentiment in Asian equities. Throughout the day the pair was trading with depreciative bias, touched a high of 77.6725 and finally closed slightly lower at 77.5825 areas. We heard PSU banks sold dollars above 77.6500 levels.
Broad Market Snapshot:
Yesterday Dow Jones again closed slightly higher 0.15% and it is fair to say that market sentiment is still fragile with inflation jitters, fears over the global economic outlook, COVID lockdowns in China, Russia/Ukraine ongoing geopolitical risks and FED interest rate policy fears all creating a poisonous cocktail.
Hawkish comments from ECB’s President Christine Lagarde that the European Central Bank is likely to start raising interest rates in the third quarter, added to risk on sentiment and correction in dollar index. EUR/USD broke above the 1.07 line for the first time since April 26 after Lagarde statement.
USD/INR Price Action and Technical:
USD/INR is trading in very range bound manner between 77.1950 to 77.8050 since last three week .While staying below 77.6700 level the momentum in the short term chart is pointing to the downside .Below 77.4950 the correction might get a little sharper. Such a dip could go even further towards 77.1950 levels. It needs to rise above 77.6700 to lessen the chances for the expected corrective dip and start attracting buying towards 77.8050 again. Some catalyst would be needed to drive the price above 77.8050 to trigger the up move. Next strong resistance level would be around 77.98 areas. Negative turn in the oscillators shows that the uptrend is slowing down.
Range for the day: 77.2750 to 77.6725
Equity insights
Indian Equity
The market is predicted to open flat, as the broader index in India is expected to open flat with a gain of 31 points, based on SGX Nifty trends.
On the daily charts, the BSE Sensex slid 236 points to 54,053, while the Nifty50 fell 90 points to 16,125, forming a bearish candle.
The pivot charts show that the Nifty’s important support level is 16,000, followed by 15,800. The important resistance levels to watch if the index rises are 16,200 and 16,400.
Other Equity
Even as global growth fears and bad U.S. economic data weighed on Wall Street overnight, Asia equities began broadly bullish on Wednesday.
Outside of Japan, MSCI’s broadest index of Asia-Pacific shares jumped 0.35 percent, Australian shares rose 0.33 percent, while Seoul and Taiwan rose 0.61 percent and 0.2 percent, respectively. The Nikkei 225 average in Japan was down 0.18 percent.
Commodity Insights
OIL
The API announced On tuesday that US crude oil stockpiles surprisingly climbed last week, while gasoline inventories declined, escalating fears about increasing gas prices with only days until the start of the US driving season, when Americans hit the road for vacation.
Oil prices surged in early trade on Wednesday, buoyed by limited supplies and the expectation of increased demand as the US summer driving season approaches.
Brent oil futures increased 46 cents, or 0.4 percent, to $114.02 per barrel in July. WTI oil futures for July delivery in the United States were up 58 cents, or 0.5 percent, to $110.35 a barrel.
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| Economic Calendar |
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| Wednesday, May 25, 2022 |
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Time | Country | Event | Forecast | Previous |
07:30 | NZD | RBNZ Interest Rate Decision | 2.00% | 1.50% |
07:30 | NZD | RBNZ Rate Statement |
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08:30 | NZD | RBNZ Press Conference |
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11:30 | EUR | German GDP (QoQ) (Q1) | 0.2% | -0.3% |
13:30 | EUR | ECB President Lagarde Speaks |
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18:00 | USD | Core Durable Goods Orders (MoM) (Apr) | 0.6% | 1.2% |
20:00 | USD | Crude Oil Inventories | -0.737M | -3.394M |
23:30 | USD | FOMC Meeting Minutes |
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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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