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Steadier starts on Risk-on sentiments - HDFC Securities 

Indian rupee expected to open slightly higher on muted price action in dollar index, higher global equities and better than expected trade data. The forward markets suggest two paise higher opening for rupee at domestic bourses.

On Wednesday, rupee extended gains after the government allowed telecom firms to receive 100% foreign direct investment without any government clearances. Spot USDINR drops 0.26% to 73.4925. Technically, the pair has turned weak on daily chart, open for 73.40 this week while it facing stiff resistance in the area of 73.60 to 73.85.

There could be some outflows following Blackstone sold $275 million worth of Embassy Office Parks REIT units priced at 355.10 rupees each while higher equities and IPO related inflows expected.

Indian bonds advance by the most in almost two months, tracking overnight gains in U.S. Treasuries. India 10-year yields fall 4bps, the most since July 26, to 6.16% and 5-year yield also drops 4bps to 5.6%

India’s trade numbers for August’21 continue to show notable progress bouncing back from the lows of last year. The cumulative merchandise exports stood at $164.1 bn during the first five months of FY22, highest level since FY18 (April-August period). Cumulative merchandise imports were at $219.8 bn in FY22 close to the pre-pandemic level of $218.9 bn in FY19. The August trade balance print at-$13.8b, est. -$13.9b, prior -$11b.

Asian stocks look set for a steady open after easing concerns about the economic growth outlook and a jump in energy shares bolstered U.S. stocks. The dollar was broadly steady against major currencies.

USDINR

Spot USDINR retraced from 50% Fibonacci retracement adjoining high 74.96 and low 72.92.

The pair has been holding bearish sequence of lower top lower bottom on daily and weekly chart.

Momentum oscillator, RSI on daily chart turned weak after Wednesday’s price action. It also turned down on hourly chart suggesting near term weakness in the pair.

Spot USDINR is having support at 73.40 and breaching of the same will open for 73.10, the upward slopping trend line support. While bias will turn bullish only above 73.95.

In medium term, the pair is expected to consolidate in range of 74.50 to 72.90

USDINR September Daily Chart

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