Rupee Gains on Foreign Fund Inflows - HDFC Securities
* Indian rupee gained on the back of a weaker dollar index, weighed down by a stronger pound as the U.K. and European Union announced a Brexit deal. As per the provisional data, foreign investors bought net Rs.3926 cr worth of equities in last five days.
* USDINR continues to trade around the 50-DMA, technical show. However, a new low for October would see trend line support broken and perhaps lead to a test of the 100-DMA.
* New 10-year sovereign yield rose 3bps to 6.50%; yield on most-traded 7.26% bond due 2029 climbed 4bps to 6.71%.
* RBI to release minutes of latest monetary policy committee meeting, hold govt. bonds, term repo and reverse repo auctions.
* The pound jumped more than 1% to a fresh five-month high after European Commission President Jean-Claude Juncker said the European Union and the U.K. reached a Brexit deal. The euro climbed above $1.11 to a seven-week high, while the yen and the Dollar Spot Index fell as haven bids waned. However, later on gave away gains following uncertainty over parliamentary nod. Britain Parliament’s approval remains the main obstacle, while Boris Johnson may find it difficult to achieve a majority. The finish line has not yet been reached, despite all optimism.
* In GBPUSD, a correction may be due as the latest rally stalls at a pivotal Fibonacci level and a sell countdown may be completed on Thursday, with risk level at 1.3096; a move to 1.2582, the high on Sept. 20 cannot be excluded as momentum studies may send reversal signals soon.
USDINR OCT. FUT. :
* USDINR October futures is having intersecting line around 71, considered as strong support or buying zone.
* The pair has started trading with higher highs and lows in rising channel.
* It has a support at 70.70 and resistance at 71.72 with bullish view. The said view will negate once the level of 70.70 breaks on closing basis.
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