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Rupee Heads for Weekly Gains - HDFC Securities 

• Indian rupee heads for first weekly gain in two following weaker crude oil prices and rebound in risk-assets. The forward markets indicating steady opening of USDINR even after overnight gains in dollar index. However, the pair could see some recovery following weaker regional currencies and profit booking moods in risk assets.

• Rupee appreciated for second day in trot following rebound in equities and stable crude oil prices. On Thursday, spot USDINR lost 5 paise or 0.07% to 76.16. Technically, the pair is expected to take support at short term moving averages around 76.00 while resistance is placed at 76.50.

• Stocks, U.S. equity futures and sovereign bonds fell Friday as the prospect of one of the Federal Reserve’s most aggressive monetary tightening cycles in recent history sowed more market discontent.

• A broad gauge of the U.S. dollar climbed, with the greenback gaining against all of its major peers as Treasury yields surged following hawkish comments from Fed Chair Jerome Powell. the 10-year U.S. Treasury yield rose 10 basis points to 2.93%; 2-year yield climbed as much as 15 basis points to a fresh cycle peak above 2.73%, the highest since late 2018.

• Powell said during an International Monetary Fund panel discussion that “it is appropriate in my view to be moving a little more quickly,” and a halfpercentage point hike in May is “on the table”.

• EURUSD falls to $1.0841, reversing earlier gains as ECB President Christine Lagarde downplays timing of rate hike during IMF panel. she pointed to the central bank’s June meeting as the moment to take decisions on interest rate hike based on new data.

Technical Observations:

• USDINR April futures retraced to middle line of the Bollinger band after touching upper band of the Bollinger.

• The pair has been heading towards descending trend line support around 75.65.

• Relative Strength Index of 14 days period hovering above 50 and consolidating indicating lackluster movement.

• MACD has been placed above zero line and flattening indicating sideway trend.

• +DI and –DI oscillating around center line and ADX line placed at 11.5 indicating weak trend.

• USDINR April futures expected to trade lower with down side support in the area of 76 to 75.84 while resist at 76.60.

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