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Dollar remains in Demand after FOMC Minutes - HDFC Securities 

• Indian rupee likely to open slightly lower following overnight gain in greenback and risk-off sentiments. However, lower crude oil prices and corporate dollar inflows could limit the down side in pair and we could see appreciation in rupee from lower level.

• Rupee snaps seven days winning streak as dollar index rebounds and risk assets sold of after FOMC minutes. Spot USDINR gained 43 paise or 0.57% to 75.76. The pair likely to move towards max pain level of 76,as per the options derivative data, in coming days.

• FOMC minutes signaled the central bank is considering half-point rate increases and reducing its massive bond holdings at a maximum pace of $95 billion a month to tighten financial conditions. The Fed’s plan to prune its near $9 trillion balance sheet brings risks for economic growth and could point to more volatility in global markets.

• Asian stock benchmark declines as Federal Reserve officials detailed a plan to shrink their balance sheet by more than $1 trillion a year while raising interest rates “expeditiously.”

• President Joe Biden’s top economic adviser said the administration has warned India against aligning itself with Russia, saying a “more explicit strategic alignment” with Moscow would have “significant and long-term” consequences.

• China signaled it would loosen monetary policy at an “appropriate time” and explore new measures to boost consumption, as authorities battle an escalating Covid outbreak

USDINR

Technical Observations:

• USDINR April futures reclaimed the 20 days exponential moving average, erasing four days loss. However, the pair is still in bearish formation of lower top lower bottom formation on daily and intraday chart.

• The pair is having strong support around 75.30, the upward slopping trend line adjoining previous two down swing.

• The pair has already retraced to 75.46, the 76.4% Fibonacci retracement adjoining low of 74.77 and 77.70.

• Momentum oscillators and indicators placed near breakeven level indicating consolidation in the pair.

• USDINR April futures expected to show upward swing in today’s trade. It has resistance around 76.30 and support at 75.70.

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