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Rupee likely to start steady in absence of new triggers  -  HDFC Securities 

Rupee expected to flat to positive amid overnight weakness in dollar index and lower crude oil price. However, the weaker start of domestic equities could weigh on local currency in second half of the day. Broadly, the pair has been in consolidation zone, lacking directional movement in absence of fresh cues.

On Monday, Indian rupee does little of interest, moved sideways for most of the day before settling with minor gains. Despite rebound in manufacturing PMI activities, price action in forex markets remained dull as participants choose to wait and watch ahead of RBI’s monetary policy scheduled on August 06. Spot USDINR is expected to likely to play out a 74.25-65 band with only break of 74.25 or 74.65 to give away another 40 paise.

Asian stocks look set to slip after U.S. equities turned lower, Treasury yields tumbled and oil slid on concerns the economic recovery from the pandemic is losing momentum. he S&P 500 ended with a modest drop and the 10-year U.S.

Treasury yield fell as low as 1.15% as the fast-spreading delta Covid-19 variant and signs of robust but softer U.S. manufacturing growth soured sentiment. The dollar slipped Monday, while the Japanese yen outperformed all of its Group-of-10 currency peers.

Meanwhile, WTI fell back to $71.5 a barrel after approaching its post 2018 highs on Friday and Gold held at $1,817 an ounce. The U.S. Senate is heading toward passage this week of a $550 billion infrastructure bill that would provide the biggest infusion of federal spending on public works in decades and mark a major milestone for President Joe Biden’s economic agenda.

Treasury Secretary Janet Yellen will talk Tuesday to House Democrats about getting tens of billions in federal rent assistance to Americans who may lose their homes following Saturday’s expiration of the eviction moratorium.

USDINR

Technical Observations:

USDINR August futures passed another day in small range and formed Doji candlestick pattern on daily chart indicating indecisiveness among traders at lower band of the range.

Momentum oscillator, RSI on hourly chart sub 50 mark suggesting consolidation in the down trend.

MACD is placed below zero line while histogram remained positive indicating weaker trend.

USDINR August futures expected to trade in the range of 74.70 to 74.40 in near term.

USDINR August Hourly Chart

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