FX Market Insight
USD/INR Spot reference {78.2550}:
Yesterday, USD/INR had a slight gap up opening at 78.13 against the previous day close of 78.0725. After opening we saw slow and steadily continuous dollar demand which pushed the pair higher from low of 78.13 to 78.29 levels. In the last half an hour we saw a sharp sudden 15 paisa movement which pushed the pair higher to 78.39 levels. The pair was trading with a depreciative bias due to negative sentiment in equity and dollar shortage in the market.
Broad Market Snapshot
Yesterday, FED Chief Jerome Powell at a hearing before the US Senate Banking Committee said that we are not trying to engineer a recession to stop inflation but are fully committed to bringing prices under control even if doing so risks an economic downturn. It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all. The FED in coming months will be looking for “compelling evidence” of slowing price pressures before it eases up on the interest rate increases it kicked off three months ago.
Yesterday global equity markets were falling heavily again, reminding us all once more why we should not get excited by the bear-market rallies. In fact, Monday’s rise was not a risk reset at all, fundamentally nothing has changed since last week. It isn’t unusual for stocks to rise after a heavy selloff.
Recession worries are also mounting as central banks around the world step up their fight against soaring inflation. The UD FED has signaled that it will take some time to tame inflation and that has driven expectations for a steady stream of massive rate hikes that will soon lead to a broader slowdown in the economy.
USD/INR Price Action and Technical:
Yesterday’s move was much sharper than anticipated after 3 p.m. IST, possibly due to dollar liquidity shortage in market and offshore higher rates. There are two nearby important resistance at 78.2950 and 78.3900. Immediate support would be at 78.1450 followed by 78.0950. Staying below 78.2950 would be taken as a sign of weakness that could bring the price down towards 78.1075 and 77.9750. It needs to rise above 78.3150 to tone down the bearishness to some extent. Unexpected rise above 78.3150 could increase the chances for extending the rise to 78.39 levels again.
Range for the day: 78.0950 to 78.3900
Other currency
The dollar index, which compares the value of the dollar to six important competitors, decreased by 0.1 percent to 104.12, marking a 0.46 percent fall since Friday.
From the two-decade peak of 105.79, it has decreased by 1.56%.
After reaching a 24-year high of 136.71 on Wednesday, the dollar dropped 0.17 percent to 135.97 yen.
But the dollar appreciated against the South Korean won, reaching 1,302.77 for the first time in 13 years, and closing the final trade at 1,300 won, up 0.19 percent.
While pound fell 0.2 percent to $0.8630, the euro hardly moved at $1,05615 per unit.
Equity Insights
Indian Equity
The Indian stock market is anticipated to begin cautiously, according to trends on the Singapore Exchange Nifty, which suggest to a flat opening for the country’s larger index with a gain of 40 points.
Yesterday, the Nifty50 fell 225.50 points or 1.44 percent to 15,413 and formed a bearish candle on daily charts, while the BSE Sensex fell more than 700 points or 1.35 percent to 51,823.
The critical support level for Nifty is set around 15,300 followed by 15,200, according to pivot charts. The critical resistance levels to watch out for on an upward trend for the index are 15,550 and 15,700.
Other Equity
On Thursday, stocks in the Asia-Pacific region increased as investors kept an eye on recession fears. In Japan, the Topix and Nikkei 225 both increased by 0.58 percent and 0.69 percent, respectively. The Kosdaq gained 0.42 percent, and the Kospi in South Korea increased by 0.64 percent. Singapore is set to release its inflation data on Thursday.
The S&P/ASX 200 index increased 0.48 percent in Australia. The largest MSCI index of Asia-Pacific stocks outside of Japan increased by 0.41 percent.
Commodity Insights
OIL
Oil losses continue as economic worries grow
As investors concerned that rash U.S. interest rate rises may spark a recession and reduce fuel consumption, oil prices sank 2% in early trade on Thursday, adding to losses from the previous day. US West Texas Intermediate (WTI) oil futures had dropped $2.39, or 2.3%, to $103.80 per barrel. To reach $109.50 a barrel, Brent oil futures fell $2.24, or 2.0%.
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Economic Calendar |
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Thursday, Jun 23, 2022 |
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Time |
Country |
Event |
Forecast |
Previous |
|
13:00 |
EUR |
German Manufacturing PMI (Jun) |
54.0 |
54.8 |
|
14:00 |
GBP |
Composite PMI (Jun) |
51.8 |
51.8 |
|
14:00 |
GBP |
Manufacturing PMI (Jun) |
54.6 |
54.6 |
|
14:00 |
GBP |
Services PMI (Jun) |
51.8 |
51.8 |
|
18:00 |
USD |
Initial Jobless Claims |
227K |
229K |
|
20:30 |
USD |
Crude Oil Inventories |
-0.569M |
1.956M |
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.
Sources
