HDFC securities Retail Research Currency Monthly securities...2005/10/20 · NSE INRUSD Future Oct20 74.4550 73.1500 73.9350 0.2625 0.36% 1567249 1304710 1841080 NSE EURINR Future

HDFC securities Retail Research

Analyst: Dilip Parmar [email protected]

05 October 2020

Currency Monthly

Currency 30-Sep-20 31-Aug-20 Chg. % Chg

DXY Index 93.886 92.144 1.742 1.89%

EURUSD 1.172 1.194 -0.022 -1.80%

GBPUSD 1.292 1.337 -0.045 -3.37%

USDJPY 105.48 105.91 -0.430 -0.41%

USDINR 73.773 73.620 0.152 0.21%

EURINR 86.506 87.507 -1.002 -1.14%

GBPINR 94.641 97.939 -3.299 -3.37%

JPYINR 69.780 69.200 0.580 0.84%

1M USDINR NDF 73.770 73.680 0.090 0.12%

Currency 30-Sep-20 31-Aug-20 Chg. % Chg

USDINR 73.7978 73.5951 0.2027 0.28%

EURINR 86.5688 87.5742 -1.0054 -1.15%

GBPINR 94.7347 98.1297 -3.3950 -3.46%

JPYINR 69.9100 69.6700 0.2400 0.34%

Instrument 30-Sep-20 31-Aug-20 Chg.

GS2030 6.0110 6.1170 -0.1060

HDFC securities Retail Research: Currency Monthly

September Month Currency Movements

September Month RBI Reference Rate

September Month India 10 Year G-Sec.

Calm Before Storm

Indian rupee marked first monthly loss after three consecutive monthly gains on back of stronger dollar index. The risk-off tone, rising covid19 cases, weaker economic data and foreign fund outflows weigh on rupee. The foreign institution had sold worth $747.3 million equities while bought $410.2 million debt in September month. Central banks were also missing in Forex market as they added few million dollar in September month. The forex reserves for the week ended 25 September were at $542.02 from $541.43 at the end of August.

Seasonality suggests October would be calm month before weakness in November month. The 10 year average seasonal price action suggests 0.13% gain in rupee during October. Technically speaking, short term trend for USDINR remains weak with downside support around 73 and resistance at 74.50.

Over the weekend, we have two big headlines, first US House passed Democrats’ $2.2trln aid bill that the Republicans have rejected. It is no surprise since the DEMs controlled the House, the ball is now over to the GOP. The other headline, someone noted, is that Trump’s aide Hope Nicks tested positive for coronavirus. Trump and First Lady will start self-quarantine. This could have temporary impact on forex market with dollar might see some short covering bounce.

As per the CFTC data, speculators bought dollars against every contract on our board, notably sterling (15.7k contracts). While the euro selling was actually quite modest (2.7k), in aggregate specs bought back 3.3 billion dollars, which was consistent with the notion of stop loss activity.

US Federal Reserve Bank credit (i.e., the Fed’s sum total of interest bearing assets) ticked to $7.01 trillion, a $15 billion decline from last week’s reading. That pushed the three-month annualized growth rate to minus 2.5%.

Going ahead, US Election and stimulus uncertainty, particularly as the jobs recovery slows, could bring stock valuation questions back to investors’ minds, putting safe haven currencies in pole position. Meanwhile, Brexit talks enter a crucial phase and the ECB remains under scrutiny as low inflation fuels stimulus speculation.


USDINR near month Futures consolidated in small

range of 72.90 to 74.15 in last month. The pair closed

below 55 Weeks Exponential Moving Average.

Medium term trend remains bearish until it closes

above 13 Weeks Exponential Moving Average.

Momentum oscillator, Relative Strength Index of 14

week period heading south suggesting continuation

of weakness.

Looking at the above technical evidences, we remain

bearish in the pair but as the pair approaches toward

oversold zone the second half of October could see

short covering bounce.

Monthly Range : 74.50 to 72.50.

Technical Observations: USDINR Continues Future Weekly Chart


EURINR near month futures holding the bullish chart

formation of higher highs and lows on weekly chart.

However, first sign of weakness has been seen as it

closes below 13 Weeks Exponential Moving Average.

To continue the bullish trend, the pair needs to hold

the level of 83.94.

Momentum oscillator, Relative Strength Index of 14

weeks exited from the overbought zone and heading

south suggesting weakness.

The above evidences suggest profit booking can be

continue in October month while closing above 87

will confirm the fresh upward movement.

Monthly Range : 84 to 88

Technical Observations: EURINR Continues Future Weekly Chart


GBPINR near month futures has a crucial support of

55 Week Exponential Moving Average support.

Recently, it has taken three times reversal from that

level.

Short term trend for the pair remains bearish as it

has closed below 13 Week Exponential Moving

Average.

Momentum Oscillators and Indicators on daily and

weekly charts are weakening.

Short term traders should keep eye on 93.33 as level

of bearish view while any level above 96 will negative

the said view.

Monthly Range : 91.70 to 98

Technical Observations: GBPINR Continues Future Weekly Chart


JPYINR futures has been consolidating in broad range

of 69 to 72. It is the text book Box example, the short

term traders can do the swing trading with by

entering long around 69 and short around 72.

The pair has been oscillating around 13 week

Exponential Moving Average.

Near term support for the pair is around 68.50, the

55 week Exponential Moving Average and resistance

around 72, seven months high.

Momentum oscillators and indicators started

weakening on daily chart.

Monthly Range : 68.50 to 72

Technical Observations: JPYINR Continues Future Weekly Chart


Dollar Index Weekly Chart EURUSD Weekly Chart

Dollar index exited from the oversold zone and the swing low from

March 9 is located at 94.65, what was support now becomes

resistance.

Although the immediate bias is bearish, buying above 95 offers a

sound technical call as It has posted a bullish outside month in

September, which offers a long-term positive bias.

EURUSD is holding up well within the current 1.1685 – 1.1770

range. As such, pullbacks still look corrective, with a break of

1.1770 opening a push back towards the range highs in the 1.1900-

1.2050 region. Hard to tell at this stage whether we develop a

lower high under 1.2010, or make a marginal new high. A decline

through 1.1685 and then 1.1612 would negating the bull bias,

opening a test towards 1.1500


GBPUSD Weekly Chart USDJPY Weekly Chart

GBPUSD extended the recent recovery to 1.2978, but have backed

off from resistance running from there up to 1.3015. Ideally,

pullbacks should remain corrective ahead of a further recovery

towards 1.3300, confirmed by a break of 1.3015. However, a drop

back through 1.2820 would negate the bull bias and again risk

another setback to test 1.26 to 1.25.

USDJPY Resistance is forming around the three month downtrend

and 55 day moving average yet again at 106. Support built up

around 105 throughout the past week has been broken and daily

indicators are turning lower.

Closing consistently below 104 really does re-open 101 once more

while level of 107.50 will negate the down trend.

Currency Monthly

High Monthly

Low Monthly

Close Monthly

Chg. Monthly % Chg.

Open Interest (30 Sep)

Monthly Open

Interest Chg.

Volume (30-Sep)

Monthly Volume Chg.

NSE INRUSD Future Oct20 74.4550 73.1500 73.9350 0.2625 0.36% 1567249 1304710 1841080 --

NSE EURINR Future Oct20 88.4200 85.8350 86.5925 -1.3450 -1.53% 123803 68240 254375 234140

NSE GBPINR Future Oct20 98.8700 93.6525 94.8825 -3.2600 -3.32% 47188 27805 366020 349906

NSE JPYINR Future Oct20 70.9200 69.1250 69.9575 0.3375 0.48% 25947 23990 52069 47001

NSE EURUSD Future Oct20 1.1873 1.1348 1.1712 -0.0243 -2.03% 3348 -- 1925 --

NSE GBPUSD Future Oct20 1.3450 1.2695 1.2836 -0.0509 -3.81% 1653 1649 1411 1409

NSE USDJPY Future Oct20 106.54 104.11 105.74 -0.12 -0.11% 21 -- 14 --

Currency Resi.2 Resi.1 Pivot Supt.1 Supt.2 8 DEMA 21 EMA 50 EMA UPPER BOLL

LOWER BOLL

RSI MACD

NSE INRUSD Future Oct20 75.15 74.54 73.85 73.24 72.54 73.79 73.94 74.47 74.21 73.48 35.79 -0.21

NSE EURINR Future Oct20 89.53 88.06 86.95 85.48 84.36 86.52 86.99 87.30 88.15 85.88 35.96 -0.44

NSE GBPINR Future Oct20 101.02 97.95 95.80 92.73 90.58 94.83 95.51 96.24 97.25 93.48 39.61 -0.72

NSE JPYINR Future Oct20 71.80 70.88 70.00 69.08 68.21 70.01 70.12 70.40 70.86 69.19 37.35 -0.11

NSE EURUSD Future Oct20 1.2169 1.1941 1.1644 1.1416 1.1119 1.1725 1.1768 1.1732 1.1946 1.1626 48.32 0.00

NSE GBPUSD Future Oct20 1.3749 1.3292 1.2994 1.2537 1.2239 1.2853 1.2917 1.2929 1.3180 1.2645 47.91 -0.01

NSE USDJPY Future Oct20 107.89 106.82 105.46 104.39 103.03 105.43 105.48 105.81 106.67 104.27 49.45 -0.13


Currency Derivative Price Actions

Technical Levels

NAME CLOSE 1 DAY 5 DAY 1 MONTH 3 MONTH 6 MONTH YTD

Dollar Index 93.844 0.14 (0.84) (0.04) (3.57) (6.32) (2.64)

Euro Spot 1.1716 (0.27) 0.73 (0.04) 4.24 7.90 4.49

British Pound Spot 1.2935 0.34 1.48 0.12 3.75 4.35 (2.43)

Japanese Yen Spot 105.29 0.23 0.28 0.18 2.10 2.49 3.15

Indian Rupee Spot 73.1425 0.86 1.04 0.86 3.36 4.29 (2.41)

Brazilian Real Spot 5.6845 (0.64) (2.14) (1.31) (5.68) (7.57) (29.20)

Australian Dollar Spot 0.7161 (0.33) 1.85 (0.01) 3.42 18.15 1.99

South Korean Won Spot 1166.7 (0.40) 0.51 0.30 2.85 5.38 (0.93)

S. African Rand Spot 16.5283 0.49 3.65 1.33 2.67 11.73 (15.30)

Canadian Dollar Spot 1.3308 (0.14) 0.59 0.08 1.92 6.24 (2.39)

Swiss Franc Spot 0.9206 (0.18) 0.84 0.03 2.68 5.80 5.00

China Renminbi Spot 6.791 0.37 0.27 0.00 4.04 4.29 2.54

Indonesian Rupiah Spot 14865 (0.20) 0.05 0.10 (3.28) 10.97 (6.72)

Gold Spot $/Oz 1899.84 (0.32) 2.06 0.74 7.01 17.71 25.21

Silver Spot $/Oz 23.7361 (0.24) 3.70 2.16 32.19 63.82 32.96

WTI CRUDE FUTURE Nov20 37.05 (4.31) (7.95) (7.88) (9.68) 13.86 (34.83)

Nifty 50 11417.0 1.51 5.66 1.51 8.20 38.32 (6.18)

S&P BSE SENSEX INDEX 38697.1 1.65 5.86 1.65 7.96 36.91 (6.20)

DOW JONES INDUS. AVG 27682.8 (0.48) 1.87 (0.36) 7.18 31.49 (3.00)

S&P 500 INDEX 3348.4 (0.96) 1.52 (0.43) 6.98 34.55 3.64

NASDAQ COMPOSITE 11075.0 (2.22) 1.48 (0.83) 8.50 50.21 23.43

FTSE 100 INDEX 5902.1 0.39 1.02 0.61 (4.14) 8.99 (21.75)

CAC 40 INDEX 4824.9 0.02 2.01 0.45 (3.64) 16.13 (19.29)

DAX INDEX 12689.0 (0.33) 1.76 (0.56) 1.28 33.21 (4.23)

NIKKEI 225 23029.9 (0.67) (0.75) (0.67) 3.24 29.23 (2.65)

HANG SENG INDEX 23459.1 0.79 (1.19) 0.00 (3.96) 1.62 (16.78)

SHANGHAI SE COMPOSITE 3218.1 (0.20) (1.88) 0.00 6.35 17.68 5.51



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 Monthly securities...2005/10/20 · NSE INRUSD Future Oct20 74.4550 73.1500 73.9350 0.2625 0.36% 1567249 1304710 1841080 NSE EURINR Future