Published on 18/11/2019 11:02:43 AM | Source: HDFC Securities Ltd

Rupee likely to Gain on Inflow Optimism - HDFC Securities

Posted in Currency Report| #HDFC Securities #Currency Tips

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Rupee likely to Gain on Inflow Optimism HDFC Securities

* Rupee was the worst performing currencies among Asian peers. It marked second consecutive weekly losses to 71.79 a dollar following weaker domestic economic data. Factory output shrank to the lowest level in eight years, as a sharp fall in capital goods production underlined weak demand.

* India’s trade deficit widened less than estimated in October, as a third-straight month of decline in exports offset a sharp plunge in imports amid weak global demand conditions.

* Sentiment for foreign institution investors may improve after Supreme court’s verdict on Essar steel which pave the way for dollars inflow. o Technically, Spot USDINR is vulnerable to a sell-off as long as it sustains below 72 with immediate support is around 71.70 and then 71.50. Nevertheless, in case of a sustained move above 72, it can aim for a 72.25 and then 72.45 level.

* Dollar index and Japanese Yen fell last week after improvement in risk sentiment which sent stocks to a record high. Among the major trading currencies pound gained the most.

* The pound registered weekly gain as traders opted to ignore signs of a downturn in U.K. data and focus instead on the Conservative Party’s lead in the polls ahead of a December election. The pound has rallied 7.8% since bottoming out in September, after Johnson reached a deal with EU for Brexit. Technically, it has been overbought on daily chart which may lead to profit booking but the bias remains bullish till election



* USDINR November futures formed higher high and higher low pattern on daily chart, considered as first sign on trend reversal.

* Momentum indicator, MACD turned positive and placed above zero line suggesting bullish trend.

* On hourly chart, oscillators are turning weak indicating near term profit booking.

* We recommend buying USDINR November futures around 71.30, TGT 72.30 stop loss 70.65.



USDINR November Futures: Buy around 71.30 TGT 72.30 SL 70.65



* It was another week of consolidation for EURINR.

* The pair has been consolidating in broad range of 78.30 to 79.72 since start of the October. Sustainable trading above 79.75 will lead to box break out with pattern target around 81.25.

* Momentum indicators are turning positive on daily chart suggesting upward breakout in coming days.

* We will wait for breakouts, till then we remain neutral and expecting the mentioned range-bound trading in next week.




EURINR November Futures: Consolidation Continues​​​​​​​



* GBPINR November futures given flag pattern break out at 92.10.

* The support now shifted to 91.50, upper line of falling channel. The pair is also trading well above short term moving averages.

* Momentum oscillators and indicators remained positive on daily and weekly chart.

* We remain bullish and hold long GBPINR November futures for target of 94 keeping stop loss intact at 91.30



GBPINR November Futures: Hold Buy given at 92.20 SL 91.30, TGT 94



* JPYINR November futures taken support at 20 Week average and triangle line.

* Overall trend of the pair has been up with higher highs and lows formation.

* Momentum indicator, MACD sustaining above zero line heading higher.

* We advice Buy JPYINR November futures above 66.80 for target of 68.50 keeping stop loss at 65.80




JPYINR November Futures: Buy Above 66.80 SL 65.80 TGT 68.50​​​​​​​



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HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475


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