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Rupee Strength Driven by Weak Dollar - HDFC Securities
* Rupee gains in line with Asian peers on expectation of US China trade deal. Indian rupee registered its best run in 12 weeks to end at 71.21 with gain of 0.74%, becoming the best performer in Asia currencies. Safe haven currencies such as dollar, yen fell as risk appetite improved on hope of US China trade deal and better than expected US economic data.
* We believe that stable oil prices and a weak dollar will play crucial role for rupee movement. In addition, a favorable seasonal swing in merchandise trade patterns in December should reduce Indian demand for foreign currency and boost the rupee.
* Technically, spot USDINR turned bearish with breaching of previous bottom. Now the support shift to 71 and resistance at 71.70.
* Indian bonds completed the largest weekly decline since April last year after the central bank unexpectedly refrained from cutting interest rates on Thursday. Yield on benchmark 10-year bonds rose 20bps this week, most since the period ended April 21, 2018, to 6.67%.
* Foreign exchange reserves continue the upward journey surging to a new high of $451.08 billion as of December 3.
* In coming week, India’s retail inflation and industrial production will be released that may add worries for country. On global front, we will have federal reserves and ECB policy meeting. Market don’t expect pause in policy rate while future outlook need to be seen by forex traders.
USDINR DECEMBER FUT. :
* USDINR December futures witnessed first sign of trend reversal with lower highs and lows on daily chart.
* The pair fell below short term moving averages.
* Momentum Oscillator, RSI turned weak and heading towards oversold zone indicating further weakness.
* Short term traders can sell below 71.25 for target of 70.30 keeping stop loss at 72.05.
USDINR December Futures: Sell Below 71.25 SL 72.05 TGT 70.30
USDINR DEC FUT DAILY CHART
* It was another week of consolidation for EURINR.
* The pair has been consolidating in broad range of 78.40 to 79.80 since start of the October.
* Sustainable trading above 79.80 will lead to box break out with pattern target around 81.20.
* Momentum indicators are also consolidating near center line.
* We will wait for break outs, till then remain neutral and expecting the mentioned range bound trading.
EURINR December Futures: Consolidation Continues
EURINR DEC FUT DAILY CHART
* GBPINR December futures closed above rising channel resistance but formed bearish candle following Doji candle indicating near term profitbooking.
* Momentum oscillators on daily chart showing negative divergence with price marking higher highs while oscillators unable to show strength.
* Short term traders should cover long position and wait for dips to initiate fresh long position around 91.70.
GBPINR December Futures: Channel Resistance
GBPINR DEC FUT DAILY CHART
* JPYINR December futures forming symmetric triangle chart pattern on daily chart.
* It has a upper descending trend line resistance around 66.45 and lower ascending trend line support at 65.60.
* Momentum oscillator, RSI of 14 days hovering near center line of 50.
* Traders should wait for the pattern breakout level of 66.45 and breakdown level of 65.60 for trading opportunity
JPYINR December Futures: Symmetric Triangle Chart Pattern
JPYINR DEC FUT DAILY CHART
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HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475
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