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Dollar gains ahead of Jackson Hole  - HDFC Securities

Indian rupee expected to open flattish ahead of Jackson Hole symposium outcome later tonight. Traders could see some depreciation as Importers may rush to cover-in their shot-term dollar payables ahead of Jackson events and recovery in crude prices.

USDINR ended on flat notes on Thursday along with other Asian currencies following muted action in dollar index. USDINR little changed at 74.2225 with loss of 2 paise. The sentiment for USDINR remains mixed until any major trigger helps it to break the 74- 74.50 range.

Foreign selling of India's stocks accelerated in the past week while the nation's benchmark equity index rose on domestic buying. The 5-day moving average of net foreign outflows accelerated to $17.6 million, falling below the 20-day average of $526,000 in inflows

Indian bonds end the day lower after traders pared positions after the central bank’s debt purchases, and ahead of Friday’s auction. RBI bought 250b rupees of bonds as planned through its government securities acquisition program or GSAP. India 10-year yields rose 1bp at 6.25%, 5-year yield also up 1bp at 5.70%.

A gauge of the dollar’s strength crept higher as the currency gained against all of its G10 peers, with traders awaiting Federal Reserve Chair Jerome Powell’s comments. Markets are divided about whether Chairman Powell’s speech Friday at the annual event will provide a clearer guide on when and how the Fed will scale back support.

A gauge of the dollar’s strength crept higher as the currency gained against all of its G10 peers, with traders awaiting Federal Reserve Chair Jerome Powell’s comments. Markets are divided about whether Chairman Powell’s speech Friday at the annual event will provide a clearer guide on when and how the Fed will scale back support.

USDINR

Technical Observations:

USDINR September futures formed Doji Candlestick pattern at lower band of the Bollinger Band which suggesting resilience of the pair to go lower.

The pair has been trading well below short term moving averages with lower top lower bottom formation indicating short term bearish trend.

Momentum oscillator, Relative Strength Index of 14 days period hovering below 50 and flattening indicating consolidation.

On Hourly chart, however, the pair has been oversold indicating short covering bounce in coming days.

USDINR September futures expected to trade within the range of 74.30 to 74.70 and likely to give breakout next week.

USDINR September Daily Chart

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