FX Market Insight
USD/INR Spot reference {77.54}:
Friday, USD/INR had a gap up opening at 77.6200 against the previous day close of 77.5750. After opening throughout the day the pair was trading in a very narrow range of 5-6 paisa only. In last 15 minutes we saw selling interest which dragged the pair from day high of 77.68 to 77.58 instantly. The pair finally closed at day low at 77.5650 levels.
Broad Market Snapshot:
We have seen a shift in financial markets over the last couple of weeks, with interest rate hike concerns being replaced by global recession fears and then risk appetite improving after a challenging period. It’s likely to be another volatile week despite numerous bank holidays in many countries. Bank of Canada will get its chance to discuss interest rate policy when it meets on Wednesday. There were many comments last week regarding when, and by how much, the ECB will raise interest rates at its July 22 meeting. Markets may get a clearer picture when the Euro-zone CPI Flash will release data on coming Wednesday. The US will also release Non-Farm Payrolls on Friday this week.
China appears conflicted as to whether to allow more weakness to boost exports which would be a headwind for other Asian currencies as well.
OPEC+ meets this week on Thursday to discuss whether to raise output by more than the expected 432,000 bpd in July 2022. With the reopening of Shanghai after a 2-month lockdown, many are expecting increasing demand and in addition, the EU is also trying to finalize its embargo of Russian Oil.
RBI monetary policy meeting is between 6-8 June 2022, where another interest rate hike is expected. India also has PMIs, Q4 GDP and Trade Balance data in this week.
USD/INR Price Action and Technical:
The pair rose to a high of 77.68 and fell to a low of 77.5650 on Friday. As per chart structure there is a good chance for the confluence of resistance near 77.6800 to hold for a recovery towards 77.1875 areas. The support at 77.4950 is an important one and a fall below this could open the way for 77.3750 first and then towards 77.1875.The chart is not showing any signs of strength for breakdown above 77.6800 levels; but if it breaks due to some unforeseen reason, then the up move could accelerate towards 77.8050 areas. Some catalyst would be needed to drive the price above 77.8050 to trigger the wild up move. Negative turn in the oscillators shows that the uptrend is slowing down. The pair has been trading in a very tight range between 77.40 – 77.67 area since last two week. Any side break we may see 20-30 paisa movement very quickly.
Range for the day: 77.3750 to 77.6800
Equity Insights
Indian Equity
The market is projected to begin in the green, with SGX Nifty trends indicating a 121-point gap-up opening for the wider index in India.
On the daily charts, the BSE Sensex rose 632 points to 54,885, while the Nifty50 rose 182 points to 16,353 and produced a bullish candle that resembled a Hanging Man pattern.
The pivot charts show that the Nifty’s main support level is 16,360, followed by 16,230. The major resistance levels to monitor if the index rises are 16,550 and 16,700
Other Equity
On Monday, Asian equities rose alongside Wall Street, but the dollar fell to five-week lows as investors bet on a slowing in US monetary tightening, although after two big boosts in June and July.
Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks rose 0.3 percent to a three-week high. The Nikkei in Japan gained 1.3 percent, while the KOSPI in South Korea gained 0.9 percent.
Commodity Insights
OIL
The price of oil has risen to $120 per barrel ahead of an EU conference on Russia sanctions.
Oil prices climbed to two-month highs on Monday as traders awaited word from the European Union on whether it would agree to ban Russian oil ahead of a meeting on a sixth round of sanctions on Russia for its invasion of Ukraine.
Brent oil futures were up 46 cents, or 0.4 percent, to $119.89 a barrel, while US West Texas Intermediate (WTI) crude futures were up 60 cents, or 0.5 percent, to $115.67 a barrel, extending strong gains from the previous week.
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| Economic Calendar |
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| Monday, May 30, 2022 |
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Time | Country | Event | Forecast | Previous |
15:30 | EUR | EU Leaders Summit |
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17:30 | EUR | German CPI (MoM) (May) | 0.5% | 0.8% |
18:00 | CAD | Current Account (Q1) | 3.2B | -0.8B |
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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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