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Rupee: Higher Opening Likely On Positive Regional Peers

• The Indian rupee may track gains in regional peers as China’s stimulus plan bolsters the outlook for Asian economies. Asian currencies strengthen against the US dollar in the morning Asian session amid risk-on sentiment driven by gains in regional equity markets. Implied opening from forwards suggests the spotUSDINRmay starttrading around 79.75. .

• On Wednesday, spot USDINR fell 5 paise to 79.82 following positive regional currency and exporter’s dollar selling. Technically, the pair is finding it difficult to cross the psychological level of 80 while on the downside 79.70 and 79.40 act as strong support areas.

• In the early trade, stocks rose in Asia as China’s latest steps to shore up its economy steadied nerves in the anxious wait for a key speech by Federal Reserve Chair Jerome Powell about the monetary policy outlook.

• Elsewhere, Crude oil added to a rally that could feed into renewed jitters about whether price pressures have peaked.

• China stepped up stimulus with a further 1 trillion yuan ($146 billion) of measures for an economy stricken by property-sector woes, Covid-linked mobility curbs and some powershortages.

• The US pending home sales fell in July for the sixth time this year to the lowest level since the start of the pandemic, extending the housing market’s sharp downturn as high borrowing costssideline prospectivebuyers.

• Bank of Japan policy board member Toyoaki Nakamura said Thursday that the central bank would continue its powerful monetary easing because the current inflation triggered by higher energy pricesis unlikely to be sustainable.

Technical Observations:

• USDINR August futures took support at 21 days exponential moving average.

• The pair has been trading in the narrow range of 79.70 to 80, for the last four days

• Momentum oscillator, relative strength index of 14 days period has been flattened around 50 indicating lacklustre movement.

• DMI is also flattened at the centre line of 25 indicating sideway direction 

• The pair is having an upward slopping trend line resistance at 79.35.

• USDINR August futures could consolidate in the range of 79.30 to 80, in the near term.

• Medium-term trend of the pair remains bullish as long as it trades above 79.30 while the short-term pullback can be seen in the coming days.

USDINR August Futures Daily Chart

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