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Rupee Falls To All-time Low In Light Trading - HDFC Securities 

* Indian rupee expected to open slightly lower following stronger dollar index and risk-averse sentiments. However, the retracement in crude oil prices and central bank intervention could restrict the losses. On Thursday, spot USDINR gained 3 paise to 77.77, another day of consolidation but on a closing basis, it made life low. Technically, the pair is expected to consolidate in a narrow range with higher side resistance around 78 and support at 77.50.

* Stocks extended a selloff on Friday and the dollar held near a three-week high as the twin blows of high inflation and slowing economic growth agitated investor concern. On Thursday, US stocks fell on low volume Thursday as many traders are sitting it out ahead of inflation data in the states Friday and the Federal Reserve’s rate decision next week.

* The dollar extended its climb to a three-week high as the euro fell while investors mulled decisions from the European Central Bank’s latest meeting where officials committed to a quarter-point increase in interest rates next month and signaled a bigger hike is possible in the fall. The yen gave up its gains against the greenback for a fifth straight day.

* In commodities, oil edged lower in part on concerns about demand as Shanghai prepares to lock down seven districts this weekend to conduct Covid testing.

* China’s inflation data were a fraction below expectations. CPI came in 0.1% points below consensus, and PPI was dead on. The low inflation both facilitates lower rates and makes the authorities more amenable to depreciation.

* The next test for markets is the US inflation print later today, which will provide clues about how aggressively the Federal Reserve must raise rates. The data are expected to show annual consumer-price gains of more than 8%.

USDINR Technical Observations:

* USDINR June futures formed Bullish Candlestick pattern with open and low remains same indicating bullishness.

* The pair has been holding support of 21 days exponential moving average currently placed at 77.62.

* Derivative data indicating long unwinding fall in price and fall in open interest. However, the volatility remained low with thin volumes.

* Relative Strength Index of 14 day oscillating around 60 indicating consolidation in up trend.

* MACD turned in weak on daily chart as it is heading south.

* In the near-term, USDINR June futures is expected to trade in the range of 77.50 to 78.10.

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