HDFC securities Retail Research Currency Insights Weekly securities...closes above 74.20 while on downside we see level of 72.90 and 72.70. USDINR Sep. Futures Weekly Chart Technical

HDFC securities Retail Research

Analyst: Dilip Parmar [email protected]

21 September 2020

Currency Insights Weekly

HDFC securities Retail Research: Currency Insights Weekly

Weaker Dollar bodes well for Rupee

Indian rupee chalked weekly gains of 8 paise to settle at 73.46 a dollar on back of overall weakness in dollar index after Fed’s comment of lower interest till 2023. The week gone was relatively stable even as major central banks kept interest rate unchanged and sound dovish for global economies. Safe haven buying has been seen in Japanese yen as global equities sawn profit booking in the week gone.

Technically, spot USDINR is having support at 72.75 and resistance at 73.91, the 200 Days Simple Moving Average.

Foreign funds are net buyer in domestic equities and debt, they bought $563 million equities and $310.9 million debt.

India’s forex reserved down by $353 million to $541.66 billion for the week ended September 11 , according to the latest data from RBI.

US Fed Reserve Bank credit (i.e., the sum total of interest-bearing assets at the Fed), rose $23 billion from a week ago to $6.991 trillion. That’s the biggest sequential increase in a month.

Leveraged funds made a bearish shift on the pound for the first time since late July, according to data from the Commodity Futures Trading Commission for the week through Sept. 15. Leveraged funds lowered net GBP long by 1,190 contracts to 8,983 and Assets managers upped net GBP short by 4,111 contracts to 12,932. The funds also cut the bullish position on the euro for a third straight week Leveraged funds reduced net EUR long by 8,697 contracts to 16,422 and Assets managers reduced net EUR long by 10,965 contracts to 303,635.

Currency Movements

RBI Reference Rate

Currency Last Prev. Close

Chg. % Chg.

DXY Index 92.926 93.333 -0.407 -0.44%

EURUSD 1.184 1.185 -0.001 -0.05%

GBPUSD 1.292 1.280 0.012 0.95%

USDJPY 104.57 106.16 -1.590 -1.50%

USDINR 73.455 73.536 -0.081 -0.11%

EURINR 87.078 87.068 0.010 0.01%

GBPINR 95.394 94.321 1.073 1.14%

JPYINR 70.360 69.200 1.160 1.68%

1M USDINR NDF 73.810 73.720 0.090 0.12%

Currency Last Prev. Close

Chg. % Chg.

USDINR 73.2970 73.4737 -0.1767 -0.24%

EURINR 86.8804 86.9693 -0.0889 -0.10%

GBPINR 95.0633 94.1732 0.8901 0.95%

JPYINR 69.9300 69.1900 0.7400 1.07%

Instrument Last Prev. Close Chg.

GS2030 6.0150 6.0410 -0.0260

India 10 Year G-Sec.


USDINR September Futures trading below short term

moving average of 5 days. Short term moving average

placed below medium term moving average

suggesting weaker trend.

The pair continues forming bearish sequence of lower

top and lower bottom on daily and weekly chart.

Momentum Oscillator, Relative Strength Index of 14

again turned weak and heading towards oversold

zone.

Looking at the above technical evidences, we remain

bearish in USDINR September futures and expect the

current downward momentum continues until it

closes above 74.20 while on downside we see level of

72.90 and 72.70.

Technical Observations: USDINR Sep. Futures Weekly Chart


EURINR September futures consolidating in the range

of 87.70 to 86.60.

It has broken the rising trend line support of 86.91,

adjoining low of 77.25 and 83.94.

The pair has broken the crucial support of 50 DEMA

and heading towards 100 DEMA i.e. 85.80.

It is having 23.6% Fibonacci support at 86.50,

adjoining low of February 77.25 and high of August

89.46.

Momentum oscillators hovering around 44, below

central line of 50.

Sell EURINR September Futures below 86.50 SL 87.50

Target 85.35.

Technical Observations: EURINR Sep. Futures Weekly Chart


GBPINR September futures took the support at 200

DSMA i.e. 94.36, and sawn short covering bounce

but unable to close above short term moving average

of 5 days.

Formation of bearish lower top lower bottom

suggesting sell on bounce.

The pair is having previous bottom support around

94 odd levels.

Momentum oscillator, RSI of 14 days period exited

from the oversold zone and hovering around 40.

Derivative data suggests short covering as price rose

while the open interest declined in the week gone.

Sell GBPINR September Futures around 95.50 SL

97.00 Target 93.75

Technical Observations: GBPINR Sep. Futures Daily Chart

200% Fibonacci Extension


JPYINR September Futures has the descending trend

line resistance at 70.45, the line adjoining 71.88 and

71.20.

The pair closed above short term moving average but

the formation is still bearish with lower top lower

bottom. Broadly, the pair has been in consolidation

since April 2020. The range is 71.80 to 69.

Momentum Oscillator, RSI of 14 days period heading

towards north suggesting upward momentum.

We short covering bounce in the week gone and with

price closing above 70.60 will make clear for bulls and

can see fresh long position.

We recommend Buying JPYINR September futures

around 69.60 SL 68.90 Target 71.25.

Technical Observations: JPYINR Sep. Futures Daily Chart


USDINR Sep. Option Distribution

0.8

8

0.0

0

0.1

8

0.0

4

1.0

2

0.3

5

2.0

3

0.6

2

2.3

2

0.7

3

1.3

1

0.4

8

1.5

2

0.1

8

1.1

7

0.1

4

0.6

9

1.1

6

0.2

1

0.4

9

0.4

5

1.6

2

0.8

5

1.9

6

0.5

0

1.3

0

0.2

0

0.7

7

0.1

8

0.8

2

0.0

7

0.2

1

0.0

1

0.1

3

0.00

0.50

1.00

1.50

2.00

2.50

72

.00

72

.25

72

.50

72

.75

73

.00

73

.25

73

.50

73

.75

74

.00

74

.25

74

.50

74

.75

75

.00

75

.25

75

.50

75

.75

76

.00

CALL OI PUT OI

-1.2

4

-0.0

2

-0.0

7

-0.9

8

-3.3

3

6.6

1

12

.09

21

.60

34

.72

12

.82

8.5

7

-11

.09

-26

.17

0.5

4

-27

.64

-1.7

4

-16

.73

-1.9

2

3.2

3

2.5

1

1.0

4

3.6

6

28

.34

9.1

9

9.2

9

1.7

6

2.3

7

-2.1

8

-0.9

0

-6.1

3

-0.2

5

-1.5

9

0.0

5

-1.9

3

-40

-30

-20

-10

0

10

20

30

40

72

.00

72

.25

72

.50

72

.75

73

.00

73

.25

73

.50

73

.75

74

.00

74

.25

74

.50

74

.75

75

.00

75

.25

75

.50

75

.75

76

.00

Tho

usa

nd

s

CALL OI CHG PUT OI CHG.


Dollar Index Daily Chart EURUSD Daily Chart

GBPUSD Daily Chart USDJPY Daily Chart


Currency Derivative Price Actions

Technical Levels

Currency High Low Close Weekly Change

Weekly % Chg.

Open Interest

Weekly OI Chg.

OI % Chg.

Volume Weekly

Vol. Chg. Volume % Chg.

NSE INRUSD Future Sep20 74.1875 73.2125 73.4775 -0.1725 -0.23% 1400949 106101 8% 2720107 912195 50%

NSE EURINR Future Sep20 87.7300 86.6400 87.0225 -0.3450 -0.39% 100811 -26370 -21% 193595 -10865 -5%

NSE GBPINR Future Sep20 95.6775 94.0525 95.4275 0.8625 0.91% 55134 -23630 -30% 353319 -57149 -14%

NSE JPYINR Future Sep20 70.5900 69.2125 70.3900 0.9950 1.43% 22324 -7495 -25% 114437 71135 164%

NSE EURUSD Future Sep20 1.1900 1.1747 1.1840 -0.0019 -0.16% 4529 -492 -10% 2573 966 60%

NSE GBPUSD Future Sep20 1.2998 1.2817 1.2986 0.0146 1.14% 1830 -286 -14% 2885 -1449 -33%

NSE USDJPY Future Sep20 105.96 104.34 104.39 -1.79 -1.69% 129 119 1190% 52 51 5100%

Currency Resi.2 Resi.1 Pivot Supt.1 Supt.2 8 DEMA 21 DEMA 50 DEMA Upper

Bollinger Lower

Bollinger RSI MACD

NSE INRUSD Future Sep20 74.55 74.10 73.62 73.17 72.69 73.69 74.07 74.73 75.52 72.70 40.10 -0.42

NSE EURINR Future Sep20 88.03 87.70 87.13 86.80 86.24 87.23 87.58 87.39 89.53 86.15 46.53 -0.26

NSE GBPINR Future Sep20 98.62 96.59 95.32 93.30 92.03 96.20 97.05 96.96 99.91 95.19 28.96 -0.50

NSE JPYINR Future Sep20 70.43 69.91 69.41 68.89 68.39 69.44 69.82 70.31 71.40 68.45 39.60 -0.39

NSE EURUSD Future Sep20 1.1940 1.1900 1.1830 1.1790 1.1720 1.1837 1.1828 1.1704 1.1959 1.1753 54.35 0.00

NSE GBPUSD Future Sep20 1.3425 1.3133 1.2951 1.2659 1.2477 1.3053 1.3104 1.2981 1.3447 1.2879 37.66 0.00

NSE USDJPY Future Sep20 106.54 106.36 106.10 105.92 105.66 106.11 106.09 106.28 106.64 105.38 50.88 -0.01


Economic Calendar

Date Country Events Period Forecast Prior

09/22/2020 19:30 EC Consumer Confidence Sep A -14.6 -14.7

09/22/2020 19:30 US Existing Home Sales Aug 6.01m 5.86m

09/23/2020 16:30 US MBA Mortgage Applications Sep-18 -- -2.50%

09/24/2020 18:00 US Initial Jobless Claims Sep-19 840k 860k

09/24/2020 18:00 US Continuing Claims Sep-12 12450k 12628k

09/24/2020 19:30 US New Home Sales Aug 890k 901k

09/25/2020 13:30 EC M3 Money Supply YoY Aug 10.10% 10.20%

09/25/2020 18:00 US Durable Goods Orders Aug P 1.10% 11.40%

09/25/2020 China BoP Current Account Balance 2Q F -- $119.6b


Disclosure: I Dilip Parmar, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 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HDFC securities Retail Research Currency Insights Weekly securities...closes above 74.20 while on downside we see level of 72.90 and 72.70. USDINR Sep. Futures Weekly Chart Technical