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Rupee Heads For Worst Quarterly loss In Two Years - HDFC Securities 

• In line with other Asian currencies, rupee expected to open higher and could gains further as day progresses as financial year end related trade has been settled and foreign institutions turns buyer in last couple of days after massive selling this quarter. The forward markets indicating USDINR could open 10 paise lower around 75.80 odd level.

• Indian rupee gained for the fifth day in trot following weaker dollar index, risk-on moods and lower crude oil prices. Central banks announcement of $5bn sell buy swap also added fuel in rupee rally. On Wednesday, spot USDINR fell 8 paise or 0.11% to 75.91.

• Technical setup has turned bearish with USDINR closing at 75.91.Going ahead, it has support at 75.70 and 75.50 while near term resistance shifted to 76.30 from 76.50.

• U.S. dollar fell for a second day, dropping against most of its Group-of-10 peers as Treasury yields eased. US Treasury 10-year yields fell 5bp to 2.35%. The euro advanced after unexpectedly high Spanish and German inflation data.

• Early today, Asia stocks were mixed while U.S. futures rose and oil dropped sharply on signs that the Biden administration is considering a massive release of crude from U.S. reserves to combat inflation. The news comes ahead of an OPEC+ supply meeting later today, where the cartel is expected to stick with its strategy of a modest output boost in May.

• China’s March PMIs were discouraging, both falling below 50.0. However, the disappointment is likely to be offset by the State Council and PBOC pledges to stabilize the economy.

USDINR

Technical Observations:

• USDINR April futures fell for the fifth day in row but formed bullish candlestick pattern after four bearish candlesticks pattern indicating short covering ahead of financial year end.

• The pair has been placed below short term and medium term moving averages indicating near term weakness.

• Relative Strength Index of 14 days period fell below 50 and heading south indicating weaker momentum.

• The option derivative data indicating call writing at 77 strike while max pain is at 76 strike indicating near term support around that level.

• USDINR April futures expected to trade in the range of 76.50 to 75.70 with negative bias.

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