Rupee Gains On Foreign Fund Inflows - HDFC Securities
Indian rupee gained in line with other Asian currencies following weaker dollar index. The foreign fund inflows in domestic equity markets also supported rupee.
Spot USDINR closed at 73.54 with loss of 5 paise a dollar. Foreign institutions have bought worth $2 billion equities so far this month.
Technically, spot USDINR is turned slightly positive as it closes above short term moving averages. It has the near term support at 73 and resistance at 74.
Federal Reserve Bank credit jumped to $7.11 trillion, up $65 billion from a week ago. That pushed the three-month growth rate of interest bearing assets at the Fed to 7.5% from 4.9% a week ago.
One of the most closely watched Treasury curves widened to a level not seen in almost four years after U.S. House Speaker Nancy Pelosi fueled optimism on the prospects for a Congressional deal on fiscal stimulus.
Meanwhile, the dollar rose for the first time in a week, edging higher as the coronavirus pandemic gained momentum in Europe. The pound and the euro fell against the greenback as governments around the continent began to deploy curfews more widely.
House Speaker Nancy Pelosi said she and Treasury Secretary Steven Mnuchin are “just about there” on resolving a key piece of a coronavirus relief package. They were nearing agreement on how to allocate money for testing and tracing to safely reopen schools and the economy, she said.
USDINR October futures closed above short term moving averages.
It has formed Doji candlestick pattern suggesting indecisiveness among traders.
Momentum oscillators and indicators turned positive on hourly and daily chart suggesting near term reversal in the trend.
The above technical evidences suggests short covering bounce may continue in coming days with higher side resistance at 74.20 and support at 73.20.
Short term traders can buy USDINR October futures around 73.50 with SL 73.30 for Target of 73.85.
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