Currency Research Desk

Currency Insight
Technical Recommendation
Exchange USDINR-MCX-Sx USDINR-NSE GBPINR MCX SX JPYINR MCX SX Contract Oct Oct Oct Oct S2 52.9533 52.9442 68.0358 85.7825 68.0958 S1 53.1467 53.1433 68.3192 86.0725 68.3642 Close 53.3400 53.3425 68.6025 86.3625 68.6325 R1 53.6267 53.6358 69.0217 86.8200 69.0467 R2 53.9133 53.9292 69.4408 87.2775 69.4608 Recommendation Sell at 53.20 TP 52.90 thnen 52.80 SL 53.40 Sell at 53.20 TP 52.90 thnen 52.80 SL 53.40 Sell at 68.30-68.35 TP 68.00 sl 68.52 Sell at 85.85 TP 85.60 then 85.40 SL 86.03 Sell at 68.13 TP 67.75 SL 68.35

September 28, 2012

EUROINR-MCX SX Oct

Market Recap
On Thursday, the rupee continued to appreciate and closed at 53.02, gaining 0.92% following the euro and positive domestic investor sentiment. Domestic indices edged lower in volatile trade on expiry of the September contract. The S&P CNX Nifty shed 13.95 points th (0.25%) to settle at 5,649.50, its lowest closing level since 20 September 2012. European stock indices closed on a positive note on economic stimulus expectations in China along with the Spanish Prime Minister Mariano Rajoy announcing a fifth austerity package and approving a new tax on lottery winning and a cut in ministry spending to shrink the Euro areas, third biggest budget deficit. The US markets closed higher after Spain unveiled its economic reform plans and amid optimism that China's government would provide additional stimulus. However, Durable goods and new homes sale data came in lower than expected. The S&P 500 finally settled at 1447, 0.96%. The overnight call money market closed at 8.00% from yesterdays close of 7.95% Indias 10-year bond yields ended lower in the last trading session, finally ending at 8.15%

Outlook
On the economic end today, there are many major economic indicators to be released. From Germany, retail sales data is expected to improve over the previous figure and, the Euro-Zone CPI is expected to be lower. From the US, personal income and personal spending is expect to be lower and may pressurize the dollar in the evening session. For the day, the rupee could continue to gain further following the surge of over 0.32% in the euro, last night after taking cues from Spanish prime minister Mariano Rajoy announcing a fifth austerity package and approving a new tax on lottery winning and a cut in ministry spending to shrink the euro areas, the third biggest budget deficit. This morning, major Asian markets are trading higher by 0.50%. From the domestic end, the SGX Nifty is also trading higher by 36 points. For today, we expect the rupee to continue to appreciate further.

Economic Events
Date Time 09/28/2012 05:20 09/28/2012 11:30 09/28/2012 14:30 09/28/2012 18:00 09/28/2012 19:25 Region JN GE EC US US Event Industrial Production (MoM) Retail Sales (MoM) Euro-Zone CPI Estimate (YoY) Personal Spending U. of Michigan Confidence Period Aug P Aug Sep Aug Sep F Survey -0.50% 0.20% 2.40% 0.50% 79 Prior -1.00% -0.90% 2.60% 0.40% 79.2

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USD/INR: Technical Analysis

USD/INR CHART

USD/INR Spot

On Thursday rupee closed on negative note, after opening at 53.47 it traded in the stiff range for the most part of day in the late session it witnessed a sudden fall and closed at 53.02 down by 0.92%. Rupee has breached the major support of 50% retracement level for the range of (48.66-57.32). Now major support is witnessing around 52.00 of 61.8% Fibonacci retreatment level for the same mentioned above for short term period. For today we expect rupee to open with gap down and may continue it bear trend. For the day we recommend to sell on pull backs and supports are witnessing at 52.80/52.50 and resistance are seen at 53.10/53.30

MCX-SX Derivatives Analysis

USDINR Oct-12 Nov-12 Dec-12 Jan-13

OPEN 53.71 53.93 54.11 54.30

HIGH 53.72 53.93 54.12 54.30

LOW 53.24 53.91 53.70 53.91

CLOSE 53.34 53.53 53.79 53.98

% CHANGE -0.76 -0.80 -0.73 -0.77

VOLUME 2,183,027 83,182 35,737 3,685

% CHANGE OPEN INTEREST 55138.54 746,779 -95.12 135,745 -71.02 61,443 -78.26 21,217

% CHANGE 3635.02 -82.19 -59.29 -85.94

NSE Derivatives Analysis

USDINR Oct-12 Nov-12 Dec-12 Jan-13

MCX-SX Spreads

OPEN 53.70 53.91 54.10 54.31

HIGH 53.73 53.93 54.15 54.33

LOW 53.24 53.46 53.70 53.92

CLOSE 53.34 53.56 53.79 54.02

% CHANGE -1.16 -1.17 -0.75 #VALUE!

VOLUME 2,219,744 105,333 20,880 10,021

% CHANGE OPEN INTEREST #VALUE! 1,402,545 12.20 286,274 -39.16 118,101 -70.80 51,883

% CHANGE #VALUE! -2.15 0.01 -56.07

NSE Spreads

USDINR Oct-12 Nov-12 Dec-12 Jan-13

Oct-12 0.0000 0.1875 0.4525 0.6350

Nov-12 0.0000 0.2650 0.4475

Dec-12

Jan-13

0.0000 0.0000

0.0000

USDINR Oct-12 Nov-12 Dec-12 Jan-13

Oct-12 0.0000 0.2150 0.4425 0.6725

Nov-12 0.0000 0.2275 0.4575

Dec-12

Jan-13

0.0000 #VALUE!

0.0000

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Forward Market (Onshore & Offshore)

FORWARDS 1-Mth Forward 3-Mth Forward 6-Mth Forward 12-Mth Forward 1-Mth NDF 3-Mth NDF 6-Mth NDF 12-Mth NDF LAST 53.1900 53.7877 54.5645 55.9972 53.1100 53.5300 54.3300 55.7800 1 Day ago 53.9488 54.5438 55.3438 56.8571 53.8100 54.2200 54.9700 56.4400 % Change -1.41 -1.39 -1.41 -1.51 -1.30 -1.27 -1.16 -1.17 Annu(%) -1.41% -4.16% -8.45% -18.15% -1.30% -3.82% -6.99% -14.03%

Major World Indices

INDICES NIFTY SENSEX NASDAQ DOW JONES INDUSTRIAL SHANGHAI COMPOSITE NIKKIE 225 HANGSENG FTSE Index LAST 5649.50 18579.50 3136.60 13485.97 2056.32 8949.87 20762.29 5779.42 1 Day ago 5663.45 18632.17 3093.70 13413.51 2004.17 8906.70 20527.73 5768.09 % Change -0.25 -0.28 1.39 0.54 2.60 0.48 1.14 0.20

Asian Currency Pairs

Currency Chinese Yuan Hongkong Dollar Indonesian Rupiah Myanmar Ringgit Philipinnes Peso Singapore Dollar Taiwan Dollar Thailand Baht LAST 8.4140 6.8390 0.5524 17.2470 1.2662 43.1418 1.8055 1.7155 1 Day ago 8.4940 6.9020 0.5562 17.3678 1.2760 43.4224 1.8202 1.7257 % Change -0.94 -0.91 -0.68 -0.70 -0.77 -0.65 -0.81 -0.59

Debt Market Information

INDICATORS LIBOR 1Mth LIBOR 3Mth MIBOR 1Mth MIBOR 3Mth U.S. 5Yr Bond Yield U.S. 10Yr Bond Yield India 10Yr Bond Yield Call Rate LAST 0.2145 0.3603 0.1200 0.2200 0.6441 1.6542 8.1590 7.9500 1 Day ago 0.2155 0.3623 0.1200 0.2200 0.6056 1.6095 8.1710 8.0000 % Change -0.46 -0.55 0.00 0.00 6.36 2.78 -0.15 -0.62

Reference Rates as on April 24, 2012

Pair USDINR GBPINR JPYINR 100 EURINR LAST 53.26 86.23 68.56 68.64 1 Day ago 53.58 86.60 68.93 68.94 % Change -0.60 -0.43 -0.54 -0.44

Price Performance
CROSS USDINR Spot MCX-SX Futures NSE Futures EURO Futures GBP Futures JPY (100) Futures ICE Dollar Index LAST 53.03 53.34 53.34 68.60 86.37 68.61 79.55 1 Day ago 53.52 53.75 53.75 69.09 86.89 69.09 79.89 % Change -0.93 -0.76 -0.76 -0.71 -0.60 -0.69 -0.42

Prepared by:Aurobinda Prasad (aurobinda@karvy.com) Research Head Harish J (j.harish@karvy.com) - Technical Analyst
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