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Published on 25/11/2022 11:08:59 AM | Source: HDFC Securities

The bearish formation of lower tops and bottom remained intact on the daily chart - HDFC Securities

Posted in Currency Report| #HDFC Securities #Currency Tips

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Market Round up

* The Indian Rupee is expected to open slightly higher following overnight weakness in the dollar index and stronger regional currencies. The forward market indicates an implied opening ofspot USDINR around 81.80.

* The rupee declined on Monday, tracking losses in emerging Asian currencies amid risk aversion spurred by concerns over tightening of Covid-related curbs in China. Spot USDINR gained 14 paise to 81.85, on Monday. However, the volumes remained light on no fresh triggers. Technically, the pair is having resistance at 82.10, the 20 days simple moving average and support at 81.20. The mediumterm trend for the pair remains bearish amid lower tops and bottomsformation.

* Stocks were mixed in Asia amid fragile sentiment as investors weighed the impact of Covid infections in China and parsed comments from Federal Reserve officials on interest ratehikes.

* The US dollar gains against all of its Group-of-10 counterparts as investors run to safety amid concernsthat China may tighten Covid curbs.

* Federal Reserve Bank of Cleveland President Loretta Mester said she has no problem with slowing down the central bank’srapid rate increases when officials meet next month. San Francisco Fed President Mary Daly said that officials will need to be mindful of the lags with which monetary policy works while repeating that she sees interestratesrising to at least 5%.

* The yen consolidates after posting its biggest drop in more than two months ahead of the holidays in Japan. The pair rose 1.3% to close near 108 on Monday, the most since Sept. 6, amid broad strength in the dollar, driven by hedging flows and concern about a possible return to stricter Covid containment measuresin China.

USDINR

Technical Observations:

* USDINR Nov fut. formed Doji Candlestick pattern near the middle band of the Bollinger Band, considered as near-term indecisiveness.

* The bearish formation of lower tops and bottom remained intact on the daily chart.

* It has resistance at 82.08, the horizontal trend-line and support at 80.80, the lower band of the Bollinger band on the daily chart.

* The derivative data indicated short covering on Monday as the pair closed with minor gains while the open interest and volumes declined.

* Looking at the above technical evidence, we believe as long as it trades below 82.10, the bias remains bearish and on the downside, 80.80 to 80.50 remains the strong support area.

 

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