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Published on 26-04-2024 12:10 pm

Crude oil

Oil prices edged up by 0.32% to settle at 6911, buoyed by an optimistic demand outlook and ongoing supply risks linked to the Middle East conflict. Despite a slowdown in U.S. economic growth in the first quarter, rising inflation indicated that the Federal Reserve might delay interest rate cuts until September. However, concerns arose as U.S. gasoline stockpiles fell less than expected, while distillate stockpiles rose contrary to forecasts, signaling potential demand slowdown. Unexpectedly, U.S. crude inventories sharply declined last week, accompanied by increased exports. This occurred amidst apprehensions about cooling U.S. business activity and the Fed's potential delay in rate cuts due to robust inflation and employment data. Meanwhile, the conflict between Israel and Hamas in the Gaza Strip threatened to escalate, potentially disrupting oil supplies. However, direct conflict between Israel and Iran, a key oil producer, has not materialized since last week. Technically, the market observed short covering, with a decrease in open interest by -1.58% to settle at 5242 contracts. Crudeoil is currently finding support at 6854, with potential downside testing at 6796. Conversely, resistance is expected at 6958, with a breakthrough possibly leading to further testing at 7004. Overall, oil prices remained resilient, driven by a combination of demand optimism, supply risks, and geopolitical tensions. Market participants are monitoring these factors closely for potential impacts on price movements and trading opportunities.

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Published on 26-04-2024 12:01 pm

Energy Outlook

• NYMEX Crude oil is expected to trade with a positive bias and remain in the range of $82 and $85 amid supply risk as the conflict in the Middle East continued to provide support. Investors remained cautious as continuous attack by Israel could lead to wider regional conflict and hurt the oil supplies. Further, hopes of better demand from US ahead of summer driving season would provide necessary support to the oil prices. Meanwhile, focus will shift towards the US inflation numbers, which would bring more clarity on the timing of the Fed rate cut. A higher for longer interest rate would support the dollar to stay higher and restrict any major upside in the oil prices.

• MCX Crude oil May future is likely to hold the support near 6800 and move back towards 7000. Only a sustained move above 7000 it would rise towards 7100 mark.

• MCX May future is expected to face the hurdle near 172 and move lower towards 160.

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Published on 26-04-2024 11:26 am

Euro and Pound Outlook

• Euro rallied by 0.29% yesterday amid weakness in dollar and upbeat economic data from euro zone. German May GfK consumer confidence index rose more than expected to a 2-year high. Additionally, hawkish comments from ECB governing council members supported single currency. For today, EURUSD is likely to face the resistance near 1.0740 level and slip towards immediate support level of 1.0700 levels (10-Day EMA) amid subdued global market sentiments. If pair breaks 1.0700 level then it may weaken further towards 1.0670 level. EURINR May is likely to slip towards 89.15 levels as long as it trades below 89.60 levels.

• Pound is expected to face stiff resistance near 1.2540 level and slip back towards 1.2470 level (10-Day EMA) amid expectation of rise in dollar ahead of PCE price index data from US. Moreover, investors are assessing the BoE’s monetary policy path after recent mixed signals from policymakers. GBPINR May is likely to move south towards 104.10 level as long as it stays below 104.70 leve

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Published on 26-04-2024 11:24 am

GBPINR

Observation

GBPINR trading range for the day is 207.24-209.04.

GBP gains as investors digested solid UK PMI data and assessed the potential impact on monetary policy trajectory.

The latest survey revealed that British business activity expanded in April by the most since May 2023.

Public sector net borrowing, in the UK decreased to £11.9 billion in March 2024 compared to £16.6 billion in the corresponding period last year.

BUY GBPINR APR @ 103.5 SL 103.3 TGT 103.8-104.

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Published on 26-04-2024 10:35 am

Technical Outlook

* Index commenced the session with a gap down led by weakness in one of the private banks however strong buying emerged across large PSU and private banks which lifted index to new session and weekly high and also closed the bearish gap of 15th April and held rising 20 -day ema indicating elevated buying demand . Price action resulted in strong bull candle which is reflective of dips attracting buying demand near 20 -day ema

* In the coming sessions we maintain buying on dips strategy as we expect index to challenge its life highs of 49000 levels . PSU banks and NBFCs would be in focus amid earnings and expected to outperform

* Key observation has been that index has held 100 -day ema for third time since February 2024 and maintained its rhythm of higher bottom indicating improving price structure

*  Structurally, index is undergoing a retracement of past couple of months rally and would help prices to come out of over bought readings .

* We revise key immediate support for Index at 47500 as it is confluence of :

* Current week’s low is placed at 47628

* 20 days average is paced at 47800

* 50% retracement of recent up move 46579 - 48625 is placed at 47600

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