FX Market Insight
Indian Rupee
USD/INR Spot reference {77.8050}:
Yesterday, USD/INR had a gap up opening at 77.7500 against the previous day close of 77.7300. After opening the pair was trading in a very tight range with depreciative bias possibly due to higher crude oil prices. We heard the presence of the RBI near 77.80 levels throughout the day. The pair touched a low of 77.7450 just after opening then high of 77.8200 and finally settled at 77.7650 levels.
USD/INR Price Action and Technical:
USD/INR stuck in a very tight range between 77.45 to 77.8050 since the last three week. Any side break we may see 25-30 paisa quick movement. While staying below 77.8050 levels the momentum in the short term chart is pointing to the downside .Below 77.5950 the correction might get a little sharper. Such a dip could go even further towards 77.4550 levels. It needs to rise above 77.8050 to lessen the chances for the expected corrective dip and start moving higher towards 77.9800 . Some catalyst would be needed to drive the price above 77.8050 to trigger the up move.
Chart structure and indicators suggest that the uptrend is weak below 77.8050 levels.
Other Currencies
The dollar is on the rise as traders look for Fed clues in the form of U.S. inflation data.
On Friday, the dollar rose to a two-week high against the euro, ahead of inflation data that might shape the Federal Reserve’s policy tightening course, and after the European Central Bank said that it will begin its rate-hike campaign next month. The dollar index, which compares the greenback to six other currencies, remained unchanged at 103.3 after gaining 0.7 percent overnight.
This week, it has gained 1.1 percent, the largest percentage rise since the last week of April. After losing 0.92 percent against the dollar on Thursday during a tumultuous ECB-driven day, the euro fell to $1.0611 in early Asia trade, its lowest level since May 23
Broad Market Snapshot:
Inflation is the only metric that matters for the FED right now, and tension among global investors will likely remain high before Today’s CPI release in the US. Even if US CPI inflation comes down a little bit more than economists’ expectations, the FED will most likely stay locked into delivering a 50 basis point rate hike over the next couple of policy decisions.
The ECB brought down the curtain on years of ultra-loose policy, committing to 25 basis increases in interest rates next month. For September they remain data dependent, but they essentially communicated that they will have to see an improvement of the inflation dynamics in order not to hike 50bp rate hike. Beyond that a sequence of gradual hikes will follow.
China appears conflicted as to whether to allow more weakness to boost exports which would be a headwind for other Asian currencies as well. Recently the PBOC continues to draw a line on further Yuan weakness, having started announcing stronger fixes as USD/CNY moved near to 6.8000.
Range for the day: 77.5950 to 77.8200
Equity Insights
Indian Equity
The Indian stock market is predicted to begin in the red, as the wider index in India is expected to open gap-down with a loss of 200 points, according to SGX Nifty trends.
On the daily charts, yesterday the BSE Sensex increased 428 points to 55,320, while the Nifty50 rose 122 points to 16,478 and formed a bullish candle.
The pivot charts show that the Nifty’s important support level is 16,100, followed by 16,000. The major resistance levels to monitor if the index rises are 16,400 and 16,500
Other Equity
In early Friday trade, Asia-Pacific stocks fell after Chinese inflation data for May came in much in line with forecasts. Investors were also anticipating the publication of US inflation data, which is scheduled later this week.
The Nikkei 225 index in Japan fell 1.27 percent as SoftBank Group shares fell 2.88 percent. The Kospi index in South Korea lost 1.34 percent. In Australia, the S&P/ASX 200 index fell 0.76 percent. Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks fell 1.23 percent.
Commodity Insights
OIL
Fears of further COVID-19 lockdown measures in Shanghai outweighed steady demand for fuels in the world’s largest consumer, the United States, on Friday, as oil prices dropped but remained around three-month highs.
After a 0.4 percent drop the day before, Brent oil futures for August were down $1.01, or 0.8 percent, at $122.06 a barrel. After falling 0.5 percent on Thursday, U.S. West Texas Intermediate crude for July slipped 98 cents, or 0.8 percent, to $120.53 a barrel.
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| Economic Calendar |
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| Friday, Jun 10, 2022 |
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Time | Country | Event | Forecast | Previous |
18:00 | CAD | Employment Change (May) | 30.0K | 15.3K |
18:00 | USD | Core CPI (MoM) (May) | 0.5% | 0.6% |
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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