IGI Logo

Spot USDINR ended at 74.24 with loss of 123 paise or 1.69% - HDFC Securities 

* September was a cruel month for domestic currency, sending the rupee to a month low and second worst month of last 17 following recovery in dollar index, foreign fund outflows and higher crude oil prices. The questions will remain unanswered whether the downturn continues in rupee. Forex markets are getting into a volatile period after being in a low volatile regime for almost 15 months, as central banks prepare themselves for policy normalisation. At the end, it is interest rate that moves the currency.

* In September, Spot USDINR ended at 74.24 with loss of 123 paise or 1.69%. Technical set up has been turned bullish for USDINR in month gone but now as we reach to upper band of last two month, swing traders may try to push it lower while dollar bulls try to pulls higher. This will make the traders favorite market who loves volatility and swing trading. From level perspective, USDINR is having resistance at 74.50 and 74.95 while expected to hold support around 73.30 this month.

* India reported the highest ever trade deficit in its history, for the month of Sep'21, at $22.94 bn. The previous high was $20.2 bn in Oct-12, when oil was above $100. The major jump was on account of import of petroleum products, which almost jumped from $11.64 bn in Aug'21 to $17.43 bn in Sep'21.

* Indian bonds end lower as traders sold ahead of a key central bank meeting this week. The 10-year yields rose 8bps to 6.25%. Markets are placed for upward revision in reverse repo rate by central bank and may unwinding emergency liquidity provide as economy showing sign of recovery while inflation remains elevated.

* Dollar enjoyed a strong bounce, with dollar index advancing 1.73% to 94.23 highest since November. The risk-averse sentiments, fresh long positions and unwinding of easy liquidity supported the gains in greenback.

* In FX, the euro long is now basically gone, as specs sold 11.2k. Traders also sold yen (8.7k) and CHF (2.4l), but bought sterling (2.2k), CAD (7.6k) and NZD (2.1k). Still, the aggregate dollar long increased by about $2 billion on the week.

Technical Observations

USDINR

* USDINR near month futures has been trading in Triangle with lower highs and higher lows. It has resistance around 74.80 and support around 73.

* The pair has been holding support of 55 weeks exponential moving averages.

* It has resistance of “Supertrend” indicators at 74.93.

* Momentum oscillator, Relative Strength Index of 14 weeks period holding well above 50 with positive cross over suggesting continuation of upward momentum.

* MACD has been placed above zero line but remains below average while bar of histogram is narrowing indicating MACD could cross average in coming week.

* USDINR October futures expected to trade in the range of 75 to 73 with neutral bias following triangle chart pattern formation on weekly chart.

Technical Observations

EURINR

* EURINR near month futures forming Bullish Harmonic pattern with support area between 85.30 to 84.40.

* The pair fell below short and medium term moving averages on weekly chart.

* It has support around 85.40, the 38.2% Fibonacci retracement level adjoining low of 77.225 and 90.48.

* The falling below 85.30 will confirm the double top formation on weekly chart.

* Momentum oscillator, Relative Strength Index of 14 weeks heading south with price and volume support indication bearishness.

* Medium term trend for EURINR October futures remains bearish and falling below 85.30 confirms big breakdown while crossing of 88 negates the said view.

Technical Observations

GBPINR

* GBPINR near month futures closed below 55 weeks moving average first time after October 2020, the first sign of medium term down trend.

* tI has also started forming lower top lower bottom on weekly chart with volume indicating bearishness.

* The pair has been trading in falling channel line with resistance around 101.45 and support around 98.50.

* The short term moving averages are placed below medium term moving averages indicating weak trend.

* Momentum Oscillators and Indicators on daily and weekly charts are sailing south suggesting bearish momentum with downtrend.

* Above technical evidences suggesting bearish trend for GBPINR October futures and short covering rally should be used to make fresh short sell. The pair is having major support around 99.30 and breaching of it will open for 93.30 level. while expected to resist in the range of 101.50 to 103.50.

Technical Observations

JPYINR

* JPYINR near month futures is having resistance around 67.50, the trend line adjoining high 71.96, 69.84, 68.58 and 67.94 while holding support around 66 odd levels

* The pair has been trading below 55 weeks exponential moving average.

* The formation of “Doji candlestick” pattern on weekly chart suggesting indecisiveness among traders.

* Momentum oscillators, relative strength index has flattened and fluctuating near 50 indicating consolidation.

* Just like other oscillator and indicator, MACD has been flatten and currently placed below zero line indicating sideway price action.

* Near term bias for JPYINR October futures remains neutral to sideway until it breaks above 68 or fall below 66. Breaching of 66 opens downside up to 64 while above 68 one can see level of 69.80.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer