FX Market Insight
USD/INR Spot reference {78.20}:
Yesterday, USD/INR had a gap down up opening at 78.26 against the previous day close of 78.3850. After opening the pair was trading in very range bound manner within 3-4 paisa range only. Later in the afternoon session after fixing slowly and steadily the pair started going up and touched a high of 78.3825 levels. Throughout that day the pair was trading with depreciating bias and finally settled at 78.32 levels. We heard the presence of RBI near higher levels.
Broad Market Snapshot:
INFLATION, INFLATION and INFLATION
We should not get excited by the bear-market rallies. Fundamentally nothing has changed since last week. It isn’t unusual for stocks to rise after a heavy selloff.
Global equity markets have fallen heavily over the last couple of weeks as aggressive tightening and heightened recession fears weigh heavily on risk appetite. They may now be establishing a temporary bottom as US yields ease off their highs but don’t get too excited. The outlook is uncertain until the inflation data shows signs of improving.
Slowly but surely, global central banks are coming around to the idea that recessions may be the price to pay for price stability. Some are better placed than others to weather the storm but even they may ultimately get swept up in it eventually.
Major central banks around the world, except for the BOJ, are in tightening mode on the back of increasing inflation. The BOJ has been the black sheep of all central banks, rigidly denying abandoning its ultra-easy monetary policy even if the long-sought inflation pressures have finally shown up in the economy.
BOJ : Dovish
US FED : Hawkish
BOC : Hawkish
RBI : Less Hawkish
ECB : Less Hawkish
BOE : Less Hawkish
USD/INR Price Action and Technical:
Strong short-term resistance at 78.2950 , but a rise above 78.2950 would be taken as a sign of more weakness that could take the price up towards 78.3900.In the short-term while staying below 78.2900 it is more likely to fall below 78.1950 , triggering further fall towards 78.1075 or even 77.9750. It needs to rise above 78.2900 to tone down the bearishness to some extent.
Immediate resistance would be at 78.2950 followed by 78.3900. Supports are near 78.1950 and 78.1075
Range for the day: 78.0950 to 78.3900
Other currency
The euro dropped 0.5 percent to $1.0509 when compared to the dollar. For the third time this week, it previously fell below a crucial $1.05 threshold.
In relation to the yen, the euro fell 1.4 percent to 141.85 yen. The dollar index increased by 0.3% to 104.48. Against the yen, the dollar dropped 0.9% to 134.94 yen , retreating further away from a 24-year high hit earlier this week.
For the week ending June 18, initial unemployment claims in the United States decreased to a seasonally adjusted 229,000. Since falling to more than a 53-year low of 166,000 claims in March, claims have been stagnant.
Equity Insights
Indian Equity
Since SGX Nifty trends suggest to a favourable beginning for the larger Indian index with a gain of 55 points, the Indian stock market is anticipated to open in the green
The Nifty easily closed over 15,500 on June 23, and the Indian benchmarks recovered the majority of their session losses to close on a bullish note. The Nifty was up 143.40 points or 0.93 percent at 15,556.70 at closure, while the Sensex was up 443.19 points or 0.86 percent at 52,265.72.
The critical support level for Nifty is set around 15,450 followed by 15,300, according to pivot charts. The critical resistance levels to watch out for on an upward trend for the index are 15,750 and 15,900.
Other Equity
On Friday, 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 0.33 percent and 0.73 percent, respectively. The Kosdaq gained 4.50 percent, and the Kospi in South Korea increased by 2.26 percent.
The S&P/ASX 200 index increased 0.27 percent in Australia. The largest MSCI index of Asia-Pacific stocks outside of Japan increased by 0.85 percent.
Commodity Insights
OIL
Due to a limited supply and unclear inventory, oil prices are rising.
Early Friday morning Asian trading saw a modest increase in oil prices as countries work to address the world’s restricted crude oil and gasoline supplies.
While U.S. West Texas Intermediate (WTI) oil futures increased by 37 cents, or 0.4 percent, to $104.31 a barrel at 00:12 GMT, Brent crude futures increased by 39 cents, or 0.4 percent.
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Economic Calendar |
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Friday, June 24, 2022 |
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Time |
Country |
Event |
Forecast |
Previous |
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11:30 |
GBP |
Retail Sales (MoM) (May) |
-0.7% |
1.4% |
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19:30 |
USD |
New Home Sales (May) |
588K |
591K |
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
