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Market Round up

* Indian rupee could open slightly lower following risk-averse sentiment and the higher dollar index. On Monday, the rupee was the worst-performing currency among the Asian baskets amid higher dollar demand and corporate dollar outflows. Spot USDINR gained 48 paise or 0.6% to 81.80.

Implied opening from forwards suggests spot USDINR may start trading around 81.82. Technically, the pair has strong resistance at 82.10 and support around 81.50.

After the Gujarat state election exit poll suggests BJP looks set to retain power, the focus will shift to RBI monetary policy decision. The market participants to see whether members believe further rate hikes should only be done after gauging the impact of the hikes completed so far

Global funds have bought Indian bonds for nine straight days and bought a net $109.4 million of debt on Dec. 2, as per the SEBI data. Indian benchmark 10-year bond yield is steady at around 7.23.

Asian stocks were mixed on Tuesday as investors weighed unexpectedly strong US services data and China’s accelerated moves toward exiting its Covid-Zero policy. US Treasury yields were little changed in Asian trading after surging Monday as the services reading bolstered the case for the Federal Reserve to deliver higher interest rates.

Commodity currencies rose on expectations of further easing of Covid restrictions in China, as the dollar gave up some of its Monday gains. The Dollar Spot Index fell 0.2%, paring back a 0.8% increase on Monday, which was driven by an unexpected gain in a US services gauge. The dollar index, a basket of six currencies, was last quoted at 105.08, holding the multi-year horizontal support line

Yen erases earlier gains as BOJ Governor Kuroda reiterates his intention to keep monetary policy accommodative. BOJ will continue with monetary easing even if wages rise 3% as long as the price goal isn’t achieved, Kuroda says

USDINR

Technical Observations:

USDINR Dec fut back with a bang and covered all the losses of the last fifteen days in one go on Monday.

The pair reclaimed the 20-day moving average and will challenge the horizontal trend line and previous swing low resistance of 82.10.

For the time being, the support has been shifted to 80.80.

The derivative data indicates Long unwinding in the pair with a gain in price, open interest and volumes.

Momentum oscillator, RSI made a U-turn and is currently placed above 50 and heading higher suggesting positive momentum.

Looking at the above technical evidence, We will turn bullish only above 82.10 while on the downside there is 81.60 and 81 remains a major support area.

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