Weaker Dollar bodes well for Rupee - HDFC Securities
* Indian rupee chalked weekly gains of 8 paise to settle at 73.46 a dollar on back of overall weakness in dollar index after Fed’s comment of lower interest till 2023. The week gone was relatively stable even as major central banks kept interest rate unchanged and sound dovish for global economies. Safe haven buying has been seen in Japanese yen as global equities sawn profit booking in the week gone.
* Technically, spot USDINR is having support at 72.75 and resistance at 73.91, the 200 Days Simple Moving Average.
* Foreign funds are net buyer in domestic equities and debt, they bought $563 million equities and $310.9 million debt.
* India’s forex reserved down by $353 million to $541.66 billion for the week ended September 11 , according to the latest data from RBI.
* US Fed Reserve Bank credit (i.e., the sum total of interest-bearing assets at the Fed), rose $23 billion from a week ago to $6.991 trillion. That’s the biggest sequential increase in a month.
* Leveraged funds made a bearish shift on the pound for the first time since late July, according to data from the Commodity Futures Trading Commission for the week through Sept. 15. Leveraged funds lowered net GBP long by 1,190 contracts to 8,983 and Assets managers upped net GBP short by 4,111 contracts to 12,932. The funds also cut the bullish position on the euro for a third straight week Leveraged funds reduced net EUR long by 8,697 contracts to 16,422 and Assets managers reduced net EUR long by 10,965 contracts to 303,635.
* USDINR September Futures trading below short term moving average of 5 days. Short term moving average placed below medium term moving average suggesting weaker trend.
* The pair continues forming bearish sequence of lower top and lower bottom on daily and weekly chart.
* Momentum Oscillator, Relative Strength Index of 14 again turned weak and heading towards oversold zone.
* Looking at the above technical evidences, we remain bearish in USDINR September futures and expect the current downward momentum continues until it closes above 74.20 while on downside we see level of 72.90 and 72.70.
* EURINR September futures consolidating in the range of 87.70 to 86.60.
* It has broken the rising trend line support of 86.91, adjoining low of 77.25 and 83.94.
* The pair has broken the crucial support of 50 DEMA and heading towards 100 DEMA i.e. 85.80.
* It is having 23.6% Fibonacci support at 86.50, adjoining low of February 77.25 and high of August 89.46.
* Momentum oscillators hovering around 44, below central line of 50.
* Sell EURINR September Futures below 86.50 SL 87.50 Target 85.35.
* GBPINR September futures took the support at 200 DSMA i.e. 94.36, and sawn short covering bounce but unable to close above short term moving average of 5 days.
* Formation of bearish lower top lower bottom suggesting sell on bounce.
* The pair is having previous bottom support around 94 odd levels.
* Momentum oscillator, RSI of 14 days period exited from the oversold zone and hovering around 40.
* Derivative data suggests short covering as price rose while the open interest declined in the week gone.
* Sell GBPINR September Futures around 95.50 SL 97.00 Target 93.75
* JPYINR September Futures has the descending trend line resistance at 70.45, the line adjoining 71.88 and 71.20.
* The pair closed above short term moving average but the formation is still bearish with lower top lower bottom. Broadly, the pair has been in consolidation since April 2020. The range is 71.80 to 69.
* Momentum Oscillator, RSI of 14 days period heading towards north suggesting upward momentum.
* We short covering bounce in the week gone and with price closing above 70.60 will make clear for bulls and can see fresh long position.
* We recommend Buying JPYINR September futures around 69.60 SL 68.90 Target 71.25.
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