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Risk-off Sentiments And Month End Dollar Demand To Dominate-  HDFC Securities 

Indian rupee expected to open lower following stronger dollar index and higher crude oil prices. Risk averse sentiments and foreign fund outflows could weigh on rupee in today’s trade.

On Wednesday, spot USDINR gained 31 paise to 74.57 following stronger Chinese yuan and other regional currencies against US dollar. However, geopolitical risk and month end dollar demand from oil importers likely to push USDINR higher in today’s trade. Technically, the pair is having strong support around 74.30, the 200 days simple moving average and resistance at 74.80

Asian stocks may extend a selloff Thursday after Kremlin said separatists in eastern Ukraine asked President Vladimir Putin for help, a step that could lead to Russian troop deployments. While dollar gauge was flat on Wednesday, gained in Asian trading on continued tensions in the Ukraine-Russia conflict soured the risk market outlook and U.S. stocks fell for a fourth day.

The cost of everything from oil to grains to metals has jumped because of the standoff in eastern Europe. Oil pushed higher as traders weighed possible risks to Russian energy exports against the potential release of some strategic reserves to restrain prices.

President Joe Biden expanded sanctions against Russia on Wednesday, as Ukraine declared a state of emergency. New U.S. penalties were aimed at the company that built the Nord Stream 2 gas pipeline and its corporate leadership.

Besides some revised US GDP data, today will also be light for macro data in the G-7, and the Russia-Ukraine situation is likely to continue to dominate markets

Technical Observations:

USDINR March futures traded well below short and medium term moving averages of 21 and 55 days exponential moving averages.

The pair has started forming lower top lower bottom sequence on hourly chart.

Relative Strength Index of 14 days period pierced below average and placed at 42.5.

MACD has been placed below zero line and heading south indicating weaker trend

Short buildup has been seen with fall in in price and rise in volume and open interest.

Option data indicating maximum open interest at 75 strike while call writing has been seen on 76 strike and put writer active below 74.50 strike.

USDINR March futures expected to consolidate in narrow range of 74.60 to 75.25

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