HSL PCG CURRENCY DAILY

03 February, 2017

PRIVATE CLIENT GROUP [PCG]

 VIEW POINT
STRATEGY FOR THE DAY Rupee Rally to Continue
Indian rupee strengthened against the US dollar on sustained dollar
BUY JPYINR FEB. FUT. selling by banks and exporters. It is the seventh consecutive session
and hit eight week high against the US dollar tracking gains in the
BUY AT 59.90 SL 59.70 TGT 60.30 local equity and Asian currencies markets.
Rupee closed at 67.38--a level last seen on 8 December 2016, up
MAJOR CURRENCY 0.15% from its previous close of 67.48.
India's 10-year bond yield closed at 6.401% from its Wednesday's
Prev. close of 6.431%.
Close Chg. % Chg. Dollar Calm Before US Employment Data
Close
The dollar calm, poised for weekly losses, as investors awaited U.S.
USDINR 67.375 67.475 -0.100 -0.15%
employment data for clues to the timing of the Federal Reserve's
DXY INDX 99.835 99.790 0.045 0.05% next interest rate hike. Earlier this week, Trumps comment pushes
EURUSD 1.076 1.076 0.000 0.00% dollar lower against major trading currencies.
GBPUSD 1.252 1.253 -0.001 -0.06% Data released yesterday, showed worker productivity slowing in the
USDJPY 112.660 112.800 -0.140 -0.12% fourth quarter, which economists said suggested companies would
DG USDINR 67.408 67.527 -0.119 -0.18% need to keep hiring to increase output. Also, the nonfarm payrolls
report is due later in the session and is expected to show employers
GLOBAL INDICES added 175,000 jobs in January.
Dollar index edged up 0.1% to 99.867, on track to shed 0.6% for a
week that saw it dip as low as 99.233, its lowest since late
Prev. November.
Close Chg. % Chg.
Close Technically, dollar index is showing weakness on chart with down
SGX NIFTY 8730.0 8734.0 -4 -0.05% side expected up to 97.43 while 103.90 remains hurdle.
NIFTY 8734.3 8716.4 18 0.20% USD/JPY May Break Below 112 as BOJ Bond Buy Disappoints
SENSEX 28226.6 28141.6 85 0.30% Bank of Japan fails to calm Japanese bond and currency markets
HANG-SENG 23044.2 23184.5 -140 -0.61% which are looking for bolder steps to stem the sharp rise in 10-year
yields.
NIKKEI 18843.7 18914.6 -71 -0.37%
Strong U.S. jobs data is unlikely to boost USD/JPY past 114 where
SHANGHAI 3143.0 3159.2 -16 -0.51% resistance has proven quit strong, dollar to fall below 112 yen
S&P INDEX 2280.9 2279.6 1 0.06% sooner than later.
DOW JONES 19884.9 19890.9 -6 -0.03% PBOC Raised Lending Rates on SLF
NASDAQ 5636.2 5642.7 -6 -0.11% PBOC raised overnight rate for its standing lending facility loans to
FTSE 3.1% from 2.75%, Reuters reports, citing two unidentified banking
7140.8 7107.7 33 0.47%
sources. Rate for 7-day tenor was raised to 3.35% from 3.25%; rate
CAC 4794.3 4794.6 0 -0.01%
for one-month to 3.7% from 3.6%. Adjustment to the interest rates
DAX 11628.0 11659.5 -32 -0.27% was effective on Feb. 3.

PRIVATE CLIENT GROUP [PCG]

 TECHNICAL OUTLOOK

SPOT USDINR DAILY CHART

Technical Observations

USDINR headed lower for the fifth day in row and expected to find support around 67.23, the 200 days simple moving average.
Momentum oscillators RSI entered in the oversold zone indicating continuation of bearish trend.
The pair could head lower towards 67.23, the previous bottom, and face resistance at 68.07.
The short term bias turn neutral to bearish with downside support at 67.23 until it surpass 68.10.

PRIVATE CLIENT GROUP [PCG]

TECHNICAL LEVELS

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

USDINR FEB17 67.55 67.59 67.36 67.45 67.50 67.64 67.73 67.78 Short Buildup
EURINR FEB17 73.04 73.04 72.72 72.83 72.94 73.15 73.26 73.37 Short Buildup
GBPINR FEB17 85.52 85.61 84.86 85.14 85.33 85.80 86.08 86.26 Long Buildup
JPYINR FEB17 60.10 60.06 59.60 59.74 59.92 60.24 60.38 60.56 Short Covering

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 68.23 68.02 68.39 67.38 68.86 66.07 67.74 68.02 68.04 67.47 67.24
EURINR 73.35 72.67 73.35 70.72 77.49 70.42 72.73 72.51 72.07 73.00 74.10
GBPINR 86.27 84.49 86.27 81.78 100.49 80.89 85.06 84.12 84.44 84.14 88.04
JPYINR 60.49 59.10 60.49 57.71 68.11 57.25 59.49 59.46 59.01 61.59 62.85

CURRENCY MOVEMENT
Abs Open Chg. in Chg. in
Currency Open High Low Close Volume
Chg. Interest OI Volume
SPOT USDINR 67.42 67.51 67.38 67.38 -0.10 -- -- -- --
USDINR FEB. FUT. 67.62 67.68 67.54 67.55 -0.15 1405198 129170 1024756 -266806
SPOT EURINR 72.72 72.94 72.69 72.80 -0.06 -- -- -- --
EURINR FEB. FUT. 72.99 73.15 72.94 73.04 -0.11 58379 163 38608 493
SPOT GBPINR 85.52 85.67 85.18 85.26 -0.01 -- -- -- --
GBPINR FEB. FUT. 85.67 85.89 85.42 85.52 0.01 41677 3312 78600 5515
SPOT JPYINR 59.73 60.04 59.71 59.89 0.34 -- -- -- --
JPYINR FEB. FUT. 59.92 60.20 59.88 60.10 0.31 20364 -1534 41722 15835

PRIVATE CLIENT GROUP [PCG]

 ECONOMIC EVENTS RELEASED

Date Time Country Event Period Survey Actual Prior

02/02/2017 15:00 UK Markit/CIPS UK Construction PMI Jan 53.8 52.2 54.2

02/02/2017 17:30 UK Bank of England Bank Rate 2-Feb 0.25% 0.25% 0.25%
02/02/2017 17:30 UK BOE Asset Purchase Target Feb 435b 435b 435b
02/02/2017 17:30 UK BOE Corporate Bond Target Feb 10b 10b 10b
02/02/2017 19:00 US Nonfarm Productivity 4Q P 0.90% 1.30% 3.10%
02/02/2017 19:00 US Initial Jobless Claims 28-Jan 250k 246k 259k
02/02/2017 19:00 US Continuing Claims 21-Jan -- 2064k 2100k
02/03/2017 06:00 JN Nikkei Japan PMI Services Jan -- 51.9 52.3
02/03/2017 07:15 CH Caixin China PMI Mfg. Jan 51.8 51.0 51.9

ECONOMIC EVENTS TODAY

Date Time Country Event Period Survey Prior

02/03/2017 10:30 IN Nikkei India PMI Services Jan -- 46.8

02/03/2017 14:30 EC Markit Eurozone Services PMI Jan F 53.6 53.6
02/03/2017 15:00 UK Markit/CIPS UK Services PMI Jan 55.8 56.2
02/03/2017 19:00 US Change in Nonfarm Payrolls Jan 175k 156k
02/03/2017 19:00 US Unemployment Rate Jan 4.70% 4.70%
02/03/2017 20:15 US Markit US Services PMI Jan F -- 55.1
02/03/2017 20:30 US ISM Non-Manf. Composite Jan 57 57.2

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]