FX Market Insight
USD/INR Spot reference {77.61}:
Yesterday, USD/INR had a gap up opening at 77.6475 tracking higher oil prices against the previous day close of 77.5325. Throughout the day the pair was trading in very tight range of 9-10 paisa only. We heard the presence of the RBI near 77.70 levels. The pair swung both sides touched a low of 77.6275 then high of 77.6950 and finally settled at 77.6400 areas.
Broad Market Snapshot:
Yesterday, the European leaders finally announced their decision to partially ban Russian oil imports. The move sent crude oil prices higher and the EUR/USD sharply lower, as the new sanctions may take a toll on the euro zone economy and trigger global inflation fears again in the financial market. Will European ban affect OPEC decision? OPEC+ countries will meet this week on Thursday to discuss whether to raise output by more than the expected 432,000 bpd in July 2022.
Markets may also get a clearer picture on ECB interest rate hike 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.
Next RBI monetary policy meeting is on 6-8 June 2022 where another interest rate hike is expected.
USD/INR Price Action and Technical:
Immediate resistance is near 77.6950. It needs to rise above 77.6950 levels to tone down the bearishness to some extent. Intraday if it breaks 77.6950, 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. Unexpected rise above 77.8050 would not only erase the bearishness but also would attract buying towards 78.00 levels.
Broad range is between 77.40-77.80 levels. Any side break we may see a quick 25-30 paisa movement.
Range for the day: 77.3750 to 77.6950Equity Insights
Equity Insights
Indian Equity
The market is predicted to begin in the red, as the wider index in India is projected to open with a loss of 85 points, based on SGX Nifty trends.
The BSE Sensex dropped almost 350 points to 55,566 after climbing over 2,100 points in three straight sessions, while the Nifty50 dropped 77 points to 16,584.5 and created an Inside Bar or Doji pattern on the daily charts.
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 16,800 and 17,000.
Other Equity
In early Wednesday trade, Asia-Pacific stocks were mostly higher, as investors awaited market response to the release of a private survey on Chinese industrial activity for May. The Shanghai Composite increased by 0.1 percent, while the Shenzhen Component increased by a fraction of a percent. The Hang Seng index in Hong Kong fell 0.12%.
In Japan, the Nikkei 225 rose 0.62 percent, while the Topix index rose 1.16 percent. The S&P/ASX 200 index rose 0.23 percent in Australia.
Commodity Insights
OIL
Oil prices have risen as a result of the EU’s prohibition on Russian oil
Early in Asian trade on Wednesday, oil prices surged as European Union officials agreed to a partial and phased embargo on Russian oil, and China lifted its Covid-19 lockdown in Shanghai.
Brent crude for August delivery was trading at $116.38 a barrel, up 78 cents, or 0.7 percent. On Tuesday, the front-month contract for July delivery expired at $122.84 a barrel, up 1%. WTI crude in the United States increased 63 cents, or 0.6 percent, to $115.30 per barrel. Both benchmarks concluded May with gains, marking the sixth month in a row that prices have risen.
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| Economic Calendar |
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| Wednesday, Jun 01, 2022 |
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Time | Country | Event | Forecast | Previous |
07:00 | AUD | GDP (QoQ) (Q1) | 0.5% | 3.4% |
07:15 | CNY | Caixin Manufacturing PMI (May) | 48.0 | 46.0 |
13:25 | EUR | German Manufacturing PMI (May) | 54.7 | 54.6 |
14:00 | GBP | Manufacturing PMI (May) | 54.6 | 55.8 |
19:30 | CAD | BoC Interest Rate Decision | 1.50% | 1.00% |
19:30 | USD | JOLTs Job Openings (Apr) | 11.400M | 11.549M |
19:30 | USD | ISM Manufacturing PMI (May) | 54.5 | 55.4 |
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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