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Rupee Likely To Open Higher After Holiday - HDFC Securities

* Indian rupee expected to start on positive note after Monday’s holiday mainly on back of weaker dollar index and strong risk appetites. Asian stocks are set for a muted open as traders weigh a record-breaking run in the S&P 500 against concerns the delta virus variant will choke global growth.

* The forward markets indicate USDINR could open 10-12 paise lower to adjust the movement of late Friday and Monday price actions.

* Spot USDINR on Friday closed at 74.25 a paise lower amid risk-on sentiments and lower dollar index. Technically, spot USDINR is having support around 74 odd levels while 74.60 remains strong resistance. The pair is expected to consolidate in the range of 74 to 74.60 with bias remaining on bearish side

* A gauge of the dollar rose for the second session in four, while 10-year U.S. Treasury yields slipped as investors await minutes from the last Federal Reserve meeting due Wednesday. Near term momentum for dollar index remain lower until it closes above 93.50.

* Boston Fed chief Eric Rosengren expects to see enough jobs growth to merit announcing plans to reduce bond buying at next month’s meeting.

* China’s economy slowed more than expected, adding to signs that the global recovery is coming under pressure as the delta virus variant snarls supply chains and undermines consumer confidence.

* China’s economy slowed more than expected, adding to signs that the global recovery is coming under pressure as the delta virus variant snarls supply chains and undermines consumer confidence

* When the Taliban took over Afghanistan the first time, China refused to recognize them and left its embassy shut for years. This time, Beijing has been among the first to embrace the Islamist militants.

USDINR

Technical Observations:

* USDINR August futures formed triple tops near 75.35 and broken the multiple bottom support of 74.70. Recently, the pair get resisted at horizontal trend line at 74.65.

* The pair has been forming lower top lower bottom on daily chart and trading well below short term moving averages.

* Formation of multiple Doji Candlestick with low volume and volatility indicating indecisiveness but the direction still remained on downside.

* USDINR August futures expected to trade with negative bias and could touch level of 74 in coming days while 74.70 remains resistance .

USDINR August Daily Chart

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