HSL PCG CURRENCY DAILY

09 February, 2017

PRIVATE CLIENT GROUP [PCG]

 VIEW POINT
STRATEGY FOR THE DAY Rupee Climb To 3 Month High After RBIs Big Surprise To Hold
Rate At 6 Year Low
USDINR FEB. Fut.
Rupee ended at three month high to 67.19- a level last seen on 10
SELL AROUND 67.30 SL 67.50 TGT 67.03 November 2016, up 0.33% from its previous close of 67.41. It
closed higher in 10 out of 11 trading sessions. RBI unexpectedly
MAJOR CURRENCY kept interest rates unchanged for a second straight meeting as the
prospect of more tightening from the US Federal Reserve limits
Prev. space for global peers to ease. It changed its policy stance to
Close Chg. % Chg. neutral from accommodative.
Close
The Reserve Bank of India surprised markets by holding its
USDINR 67.190 67.413 -0.222 -0.33%
benchmark rate at 6.25% and changing its stance to neutral from
DXY INDX 100.370 100.280 0.090 0.09% accommodative. It also shifted its CPI inflation goal to 4% in the
EURUSD 1.068 1.070 -0.002 -0.15% medium term, below the 5% it targets by March.
GBPUSD 1.251 1.254 -0.004 -0.29% The next focus will shift to index of industrial production (IIP) data
USDJPY 112.170 111.930 0.240 0.21% on Friday, expected to be at 1.4% in December from 5.7% a month
DG USDINR 67.141 67.435 -0.294 -0.44% ago.
The one month forward non deliverable forward USDINR quoting at
GLOBAL INDICES 67.24 from yesterdays 67.41 indicating weaker opening of the pair
at domestic bourses.
Technically, Spot USDINR indicating further fall in coming days, with
Prev. downside support placed at 66.80 while continue to resist around
Close Chg. % Chg.
Close 67.70.
SGX NIFTY 8832.0 8812.0 20 0.23%
NIFTY 8769.1 8768.3 1 0.01% Yen to be in limelight ahead of US- Japan Meet
SENSEX 28289.9 28335.2 -45 -0.16% The dollar drooped against its peers early today, hovering near a
HANG-SENG 23610.3 23485.1 125 0.53% 10-week low versus the yen. USD/JPY faces headwinds amid
uncertainty over U.S. policies before Japan-U.S. summit where
NIKKEI 18983.5 19007.6 -24 -0.13%
President Trump may continue criticism about other countries
SHANGHAI 3183.8 3167.0 17 0.53% keeping their currencies weak. Beside lower U.S. yields, geopolitical
S&P INDEX 2294.7 2293.1 2 0.07% concerns stemming from Europe have also weakened the greenback
DOW JONES 20054.3 20090.3 -36 -0.18% against its Japanese counterpart by increasing demand for the safe-
NASDAQ 5682.5 5674.2 8 0.15% haven yen.
FTSE Differential in the one-year-forward two-year yields between the
7188.8 7186.2 3 0.04%
U.S. and Japan indicates that USD/JPY is undervalued by 6%. The
CAC 4766.6 4754.5 12 0.26%
pair has had a correlation of 0.88 with the forward yield spread,
DAX 11543.4 11549.4 -6 -0.05% based on their month-end levels in the past five years.

PRIVATE CLIENT GROUP [PCG]

 TECHNICAL OUTLOOK

SPOT USDINR DAILY CHART

Technical Observations

USDINR continues its down trend after one day short covering. Further, it broken the 200 SDMA and closed lowest level since Mid
November 16.
Momentum oscillators RSI exited from oversold zone and given positive cross over indicating near term recovery in the pair.
The pair could head lower towards 67.03, the previous bottom, and face resistance at 67.71.
In short term, the pair likely see some short covering with higher side placed around 67.70.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

Contracts Last Pivot S3 S2 S1 R1 R2 R3 View For The Day

USDINR FEB17 67.34 67.40 67.09 67.21 67.28 67.47 67.59 67.65 Short Buildup
EURINR FEB17 71.77 71.91 71.18 71.47 71.62 72.06 72.35 72.50 Short Buildup
GBPINR FEB17 84.11 84.23 83.63 83.87 83.99 84.35 84.59 84.71 Short Covering
JPYINR FEB17 60.01 60.09 59.68 59.84 59.93 60.17 60.33 60.41 Unwinding

Wkly Wkly 1-Mth. 1-Mth. 52 Wk 52 Wk

Spot 5 DMA 20 DMA 50 DMA 100 DMA 200 DMA
High Low High Low High Low
USDINR 68.09 67.29 68.39 67.15 68.86 66.07 67.30 67.86 67.93 67.49 67.25
EURINR 73.08 72.26 73.35 70.93 77.49 70.42 72.14 72.54 72.01 72.88 74.03
GBPINR 85.67 83.93 86.27 81.78 100.49 80.89 84.02 84.22 84.31 83.99 87.77
JPYINR 60.04 59.18 60.49 57.71 68.11 57.25 59.79 59.68 58.92 61.34 62.80

CURRENCY MOVEMENT
Abs Open Chg. in Chg. in
Currency Open High Low Close Volume
Chg. Interest OI Volume
SPOT USDINR 67.37 67.38 67.19 67.19 -0.22 -- -- -- --
USDINR FEB. FUT. 67.49 67.52 67.34 67.34 -0.20 1524134 25185 961334 168354
SPOT EURINR 72.02 72.02 71.50 71.52 -0.39 -- -- -- --
EURINR FEB. FUT. 72.17 72.20 71.76 71.77 -0.35 65538 5785 45711 4793
SPOT GBPINR 84.26 84.28 83.88 83.88 0.62 -- -- -- --
GBPINR FEB. FUT. 84.33 84.47 84.11 84.11 0.55 42115 -12738 74360 12316
SPOT JPYINR 60.08 60.11 59.82 59.83 -0.10 -- -- -- --
JPYINR FEB. FUT. 60.25 60.25 60.00 60.01 -0.10 21062 -512 34072 -9142

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Actual Prior

02/08/2017 14:30 IN RBI Repurchase Rate 8-Feb 6.00% 6.25% 6.25%

02/08/2017 14:30 IN RBI Reverse Repo Rate 8-Feb 5.50% 5.75% 5.75%
02/08/2017 14:30 IN RBI Cash Reserve Ratio 8-Feb 4.00% 4.00% 4.00%
02/08/2017 17:30 US MBA Mortgage Applications 3-Feb -- 2.30% -3.20%

ECONOMIC EVENTS TODAY

Date Time Country Event Period Survey Prior

02/09/2017 19:00 US Initial Jobless Claims 4-Feb 249k 246k

02/09/2017 19:00 US Continuing Claims 28-Jan 2065k 2064k

PRIVATE CLIENT GROUP [PCG]

 Technical Analyst: Vinay Rajani (vinay.rajani@hdfcsec.com)
Currency Analyst: Dilip Parmar(dilip.parmar@hdfcsec.com)

HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042
HDFC securities Limited, 4th Floor, Astral Tower, Above HDFC Bank Ltd, Nr.Mithakhali Six Roads, Navrangpura, Ahmedabad 380009.
Phone: (079)66070168, Website: www.hdfcsec.com Email: pcg.advisory@hdfcsec.com

Disclosure:

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PRIVATE CLIENT GROUP [PCG]