FX Market Insight
USD/INR Spot reference {79.2650}:
Yesterday, USD/INR had a gap up opening at 79.00 against the previous day close of 78.9500. After opening the pair was initially trading in a very range bound manner with mild depreciative bias. In the afternoon session, the pair abruptly broke the previous all-time high of 79.1200 levels and made a new high of 79.3750 tracking sharp selloff in EUR/USD pair and global equity market. The pair finally closed near day high at 79.3700 levels.
Other currency
The dollar stood tall on Wednesday, holding at a 20-year peak against the euro and multi-month highs against other major peers as higher gas prices and political uncertainty renewed recession fears and sent investors scrambling to the safe-haven currency.
The Euro was at $1.0262, only a fraction above its overnight low of $1.0236, its weakest since late 2002.
Sterling was also trading down slightly at $1.1965 just off its 18-month intra day low hit overnight, and the Aussie dollar was under pressure at $0.6816.The euro’s tumble, allied with declines in commodity currencies due to lower oil prices, left the dollar index at 106.46, just off its own overnight 20-year peak.
USD/INR Price Action and Technical:
Yesterday’s move was much sharper than anticipated, mainly due to sharp selloff in EUR/USD and higher India trade deficit data. There are two nearby immediate supports at 79.1750 and 79.1200 levels. The current price is quite close to a set of resistances in the 79.3075/79.3750 area. Staying above 79.2500 could restore bullishness for crossing above 79.3075 again. The current recovery is more likely to struggle to clear below 79.12 region. Unexpected dip below 79.1200 would be a negative development, hinting at the possibility of testing important support at 78.9675 and 78.8500 regions again.
Range for the day: 79.1200 to 79.3750
Equity Insights
Indian Equity
Market indicators hint to a strong start for the larger Indian index with a gain of 20 points, thus the market is anticipated to open in the green
The wider area saw a flat ending with a negative bias amid mixed market breadth, while the BSE Sensex dropped 100 points to 53,134 and the Nifty50 dropped 25 points to 15,811.
The pivot charts show that 15,700 and 15,600 are the main support levels for the Nifty. The critical resistance levels to watch out for on an upward trend for the index are 15,900 and 16,000.
Other equity
Despite Wall Street recoup the majority of its losses at the conclusion of trading on Wednesday, Asia-Pacific equities declined at the opening. Both the Topix and Nikkei 225 indexes in Japan had declines of 0.77 percent. The Kospi decreased by 0.52 percent in South Korea. Australia’s S&P/ASX 200 fell 0.35 percent. The largest MSCI index of Asia-Pacific stocks outside of Japan fell 0.16 percent.
Commodity
Oil
Oil rises beyond $100 after falling due to recessionary worries.
On worries that a recession may weaken demand, oil prices rose beyond $100 a barrel after falling more than 8% to their lowest level since late April. West Texas Intermediate increased by 2% as indications of a tight supply environment allayed concerns about a worldwide downturn. Given that supply wasn’t keeping up with demand, Goldman Sachs Group Inc. said that the decline in petroleum was exaggerated.
Despite the fact that raw material prices should stay high in the second half, Citigroup Inc. believes that commodities have peaked. A recession, according to the bank, may cause crude to drop down below $70 per barrel.
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Economic Calendar |
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Wednesday, July 06, 2022 |
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Time |
Country |
Event |
Forecast |
Previous |
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19:00 |
USA |
ISM Non-Manufracturing PMI |
54.3 |
55.9 |
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19:30 |
USA |
Jolts Job Openings (May) |
11M |
11,4M |
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23:30 |
USA |
FOMC Minutes |
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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.
Sources
