July USDINR closed at 55.69, up 60 paise . Spot USDINR
On options front: JULY 2012: Showed substantially high Put option open interest buildup at 54.00 strike with 94k contracts. Maximum Call option open interest buildup is at 55.00 strike with 130K contracts .
Put options with strike 55.50 saw maximum increase in OI for the session at +47K contracts, while those with strike at 53.50 saw sharpest decline in OI at -4K contracts. Call options with 55.50 strike saw maximum increase for the day at +42K contracts and those with strike at 54.00 saw sharpest decline in OI for the day by -43K.
Overseas increased risk aversion and monetary easing carried out by some of the major central banks Thursday has supported US dollar. But the key risk event was the June non-farm payroll data which was lower at 80k than forecasts at 90k and higher previous month's addition of 69k.
While the June NFP data disappointed, there was chatter that an addition of 80,000 jobs may not immediately force US Fed to resort to further monetary easing at its August meet. There was also a focus on the increase in Jun average earnings at +0.3% vs.+ 0.2% in May and higher than f/c at 0.2% as well as increase in June average workweek seen at 34.5 vs. forecast and May's level at 34.4, seen as an indicator that there was no deceleration in work activity.
Earlier an improved reading in German May IP (+1.6% vs prev -2.1% Apr. +0.1% expectations) was supportive of the euro but a spike in Spanish 10 year benchmark yields back to the worrying 7% level kept a check on the 17-nation currency against the US dollar. UK producer output prices fell 0.4% m/m, +2.3% y/y against expectations at 2.4% y/y and to lowest level since Oct 2009. Core producer output prices declined 0.2% m/m, +2.0% y/y and were in line with expectations and lowest since Jan 2010.
EURUSD: Closed at 1.2244 from 1.2390 and traded in 1.2259-1.2400 range. EURUSD closed near the levels seen in July 2010.
GBPUSD: Closed at 1.5486 from 1.5520 and traded the range of 1.5460-1.5550. GBPUSD closed near Jan 20, 2012 level.
USDJPY: Closed at 79.63 from 79.90 and traded in 79.48-80.01 range. USDJPY remained trapped rather in a narrow range with comments from PM Noda in talk with IMF chief Lagarde highlighted his concerns that EZ woes and resulting rise in yen was damaging to Japanese economic sentiment.
Spot USDINR has opened at 55.90 from 55.41 Friday and was trading at 55.88. USDINR could trade in 55.50-56.20 range today. USDINR has opened firm tracking the sharp gains in the greenback against the majors and in particular euro, Friday.
Also the pair has rallied back after a sharp slide in last week as the dollar inflows are seen weaker post government and corporate debt limit auctions on July 4. USDINR is likely to stay supported as the view on economic growth has tempered down and the concerns over weaker monsoon (between June 1-July 8) are creeping up steadily. The RBI officials have indicated that they will be keen watching the progress of monsoon, particularly that in first two weeks of July which are very crucial for kharif crop planting. On domestic economic data front, May IIP on Thursday and June headline inflation will be key.
Overseas, a weaker US June NFP reading has not triggered a slide in US dollar against the majors, as there are views that the current reading may still not prompt the US Fed to embark on QE3. Market observers have noted the improvement in data internals such as average work week and earnings, which point to no deceleration in activity and may prompt the Fed to wait for another month. With expectations that the US Fed might just no yet resort to QE3 on one hand and the monetary easing already carried out by other central banks (as they remain worried over an increase in economic deceleration ), US dollar could stay supported.
Technical Trades Outlook:
USDINR: Support at 55.00, 54.50 Resistances at 55.50, 56.00
55.50-56.00 remains the strong resistance zone on upside, only a sustained move above which would drift the price higher.
EURINR: Support at 68.00, 67.50 Resistances at 69.00, 69.50,
68.00 levels are acting as a good support on downside, from which it could bounce towards 69.00-69.50 levels in the near term.
GBPINR: Support at 85.30, 85.00, Resistance at 86.50, 87.00
Price is likely to continue its bounce towards 86.50-87.00 levels. Only a sustained move above 87.00 would indicate further strength.
JPYINR: Support at 68.00, 67.00 Resistances at 70.30, 71.00
70.30 would act as strong resistance zone, from where price may correct towards 69.00-68.70 levels.
EURUSD: Support at 1.220, 1.2150 Resistances at 1.2340, 1.240. Momentum oscillators are positively diverging against price decline, indicating downside may be limited and price may witness a bounce towards 1.24-1.25 levels.
USDJPY: Support at 79.50, 79.00 Resistances at 80.00, 80.50
Price continues to trade sideways, only a clear break above or below 79.50-80.00 levels would decide the further trend.
GBPUSD: Support at 1.550, 1.5450 Resistances at 1.5560, 1.560
1.5450 To act as a support on downside, from where it may witness a bounce towards 1.5560 and 1.560 levels in the near term.