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Market Round up

* Indian rupee is expected to open slightly lower following stronger Asian currencies. The yuan has enjoyed a decentsurge in the past hour. Much of it can probably be explained by the overall move lower in the dollar. However, the dollar index has surged more than a percentage from the domestic forex market close which could be on the back of month-end rebalancing and sour risk sentiment.

* On Monday, spot USDINR settled at 81.67 with a 2 paise gain after broadly consolidating in a narrow range amid the November month expiry. The MSCI rebalancing related dollar inflows and lower crude oil prices pushed the dollar lower against the rupee.

* Technically, spot USDINR is still under-pressure amid bearish chart formation of lower tops and bottom. In the near term, the pair is having resistance at 82.10 and support at 81.40. We do expect higher volatility this week amid event heavy this week.

* A gauge of the dollar slipped as month-end positioning dominated ahead of a speech by Federal Reserve Chair Jerome Powell on Wednesday. Traders are also awaiting a raft of US data due this week including non-farm payrolls after several Fed officials stressed that they will raise borrowing costs further to curb inflation. Attention remains on developments in China, where authorities deployed a heavy police presence in the capital and other major cities to prevent a repeat of the weekend’s demonstrations.

* Asian stocks dipped on the prospect of more Fed rate hikes. US-listed Chinese shares rose Monday on stronger-than-expected earnings and speculation that nationwide demonstrations may hasten a shift away fromCovid Zero policies.

USDINR

Technical Observations:

* USDINR Dec fut is facing resistance at a middle band of the Bolling band. The pair has been facing resistance around 82.10, the 20 days simple moving average.

* It has support at 80.85, the lower band of the Bollinger Band.

* It has been trading in bearish chart formation of lower tops and bottoms.

* The derivative data indicates a short buildup in the pair with a fall in the price and an increase in the volumes and open interest.

* RSI on the daily chart flatten below 50 indicating lacklustre momentum.

* MACD and MACD average line is steady below the zero-line suggesting a weak trend.

* USDINR Dec fut is expected to remain under pressure as long as it trades below 82.50 while on the downside 80.80 becomes the strong support.

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