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Rupee expected to open steady on better than expected trade number - HDFC Securities 

Indian rupee expected to open steady following risk-on sentiments in globally as US people started getting their checks of stimulus. The dollar pared its gains while U.S. stocks rebounded from an intraday low as optimism on the economic recovery eclipsed rising risks of inflation. The greenback outperformed most of its Group-of-10 currency peers and touched the highest level versus the yen since June 2020, as Treasury 10-year yields hovered around levels unseen in more than a year.

Asian stocks were set to open stronger Tuesday as optimism about the economic recovery drove U.S. shares to a record-high close. Long-term Treasury yields edged lower.

Rupee started the week on front foot following dollar inflows. Even after weaker domestic equities and stronger dollar index, local currency outperformed among Asian currencies following strong foreign inflows in primary equity market. Spot USDINR closed at 72.48 with loss of 30 paise.

Spot USDINR is in down trend and expected to touch level of 72.30 in coming days while resistance has been shifted from 73 odd level s to 72.86, the 20 Days simple moving average, after today’s weakness. India's exports grew 0.67% to $27.93 billion in February while imports rose 6.96% to $40.54 billion.

The trade deficit widened to $12.62 billion in February compared to $10.16 billion in the year-ago period. India’s merchandise trade deficit stood at $14.54 billion in January 2021.

Pound is expected to remain under pressure as European Union launched legal action against the U.K. in a major escalation of tensions between the two sides less than three months after Brexit was formally completed

Technical Observations:

USDINR March futures formed bearish candle after doji candlestick pattern indicating bearishness.

The pair closed well below short term moving averages. Momentum oscillators and indicators turned weak on hourly and daily time frame.

USDINR March futures expected to open higher and move towards 72.30 while on higher side psychological level of 73 remains resistance.

Near term outlook for USDINR March futures remains bearish until it closes above 73.00.

USDINR March Daily Chart

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