IGI Logo

Rupee Plunges to Record Low

Indian rupee is expected to open steady after Wednesday’s sell-off. The rupee is expected to trade left amid a positive dollar index, higher crude oil prices, weaker regional currencies and risk-offsentiments.

The one-month forward USDINR indicates a flat opening of the pair at the domestic bourses. On Wednesday, spot USDINR gained 63 paise or 0.76% to 82.99, the biggest single-day fall after September 20. The pair has made a fresh all-time high slightly above 83. Going ahead, the pair could further appreciate towards 83.50while 82.70 becomesthe support.

The offshore yuan was around a fresh record low while an index of US-listed Chinese companies slumped more than 7% on Wednesday to the lowest in nine years. Investors are concerned over China’s economic outlook and a rise of Covid casesin the middle of the twice-a-decade party congress.

China’s loan prime rates kept unchanged with the one-year loan prime rate set at 3.65% and the five-year loan prime rate set at 4.3% in October.

Meanwhile, the yen traded at levels last seen in 1990 and remained within a whisker of the key mark of 150 versusthe greenback.

Stocks in Asia are poised to follow Wall Street lower, with Treasury yields at multiyear highs and strong inflation driving hawkish monetary policy. Concerns over China’s economic outlook and a rise in Covid cases are also weighing on investorsentiment in Asia.

Elsewhere in markets, oil rose as traders shrugged off President Joe Biden’s remarks about taming energy prices and gold traded around the lowest in more than three weeks.

Technical Observations:

USDINR October futures given a flag pattern breakout on the daily chart by a strong bullish candlestick pattern. Theoretically, the pattern target comes at 85.50.

The pair is having near-term resistance at 83.35, the upper band of the Bollinger Band

On the downside, it has support at 82.85, the previous swing high.

Momentum oscillator, RSI has been placed in an overbought zone indicating positive momentum.

Long build-up has been seen with the rise in price, open interest and volumes.

USDINR Oct. fut. could trade right with higher side aiming at 83.35 while on the downside 82.85 acts as strong support.

USDINR October Futures Daily Chart

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer