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Investors remain cautious as risk sentiments remain sour - HDFC Securities 

* Another week, another downtick in the rupee on weak economic data, riskaverse sentiments and foreign fund outflows. Spot USDINR gained 0.69% or 53 paise to 77.45, a lifetime high close for a second week. The technical setup remains bullish as long as the spot USDINR sustains above 76.70 while on the higher side it hasresistance in the area of 77.70 to 78.30.

* In the past week, the focus has been on high inflation prints, jumps in energy prices, food shortages and China lockdowns, and yet US real yields finished the week on a softer note. That suggests the inflation theme is tired, while economic stress is building momentum. The risk of an economic downturn amid price pressures and rising borrowing costs remains the major worry for markets. The dollar has remained firmly in demand as the liquidity factor remains in focus with global liquidity drying up with hawkish central banks.

* We could see some stability in risk sentiment this week, which could favour a partial recovery in Emerging market currencies and put a cap on the dollar index upside forthe time being.

* CFTC: In Forex, the skew was heavily towards dollar selling against virtually everything but the euro, which saw enough dip-buying (23k) to flip the spec position positive. Other than that, specs sold yen (9.7k), sterling (5.8k), CAD (14k), AUD (13k), NZD (6.4k), and Swisse (5.8k.) The aggregate dollar long increased by about $1 billion.

USDINR

Technical Observations:

* USDINR May futures has been consolidated in the range of 77.30 to 77.73 in the week gone.

* Formation of multiple Doji candles in the range indicating indecisiveness.

* The pair has been sustaining well above the short term moving averages and above the previoustop.

* Momentum oscillators, Relative Strength Index of 14 days heading north with positive cross over indicating continuation of upward momentum.

* MACD has been heading higher with bigger barsindicating a bullish trend.

* USDINR May futures is expected to consolidate in the range of 77.30 to 77.75 and either side breakout will give a shortterm directional trend.

EURINR

Technical Observations:

* EURINR May futures has formed a Doji candlestick pattern below the previous bottom indicating indecisiveness while it is also considered a trend reversal one should wait for the crossing candle high of 80.72.

* Momentum oscillator, RSI has been turned negative with negative cross over and heading south indicating bearish momentum.

* MACD has been trading lower with the smaller histogram bars indicating weak sentiment and trend.

* EURINR May futures has been trading in a downward sloping channel with lower top and lower bottom indicating a bearish trend and any short-covering bounce towards 82 will be considered as a fresh selling opportunity with stop loss above 82.30 for target of 80.00.

GBPINR

Technical Observations:

* GBPINR May futures also formed a Doji candlestick pattern indicating indecisiveness.

* The short term moving averages placed below medium term moving averages suggest a shortterm downtrend.

* Formation of lower top and lower bottom on daily and weekly charts confirming a bearish trend.

* Directional Movement index showing weakness with -DI placed above +DI and ADX line strengthening indicating a strong downtrend.

* Momentum oscillator, RSI has been oscillating in the oversold zone indicating negativemomentum.

* The above technical evidence suggests a bearish trend for GBPINR May futures and any bounce towards 96 will be used to make a fresh short sell with the stop loss of 96.50.

JPYINR

Technical Observations:

* JPYINR May futures formed a higher high on the daily chart while yet to make a higherlow for trend reversal.

* The pair has closed above the short term moving average of 21 DEMA.

* Momentum oscillator, Relative strength index has been oscillating around 50 odd levels.

* MACD has been placed below the zero line but given positive crossover indicating a shortterm upward trend.

* Directional movement index is indicating reversal as +DI is about to cross –DI upward indicating upwarddirection.

* JPYINR May futures likely to witness shortcovering bounce in coming days with higher side aiming at 60.95 and 62.70 while falling below 59.35 negate the said view

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