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Slower Pace of Rate Hikes

* Indian rupee registered the first monthly gain of the calendar year following foreign fund inflows, a rebound in risk assets after Fed members turned less hawkish and lower crude oil prices. In the first half of November, the rupee appreciated nearly 250 paise but the central bank’s intervention and importers’ dollar demand trimmed the gains before settling at 81.43 with gains of 136 paise or 1.64%.

* Technical set-up has turned bearish for the USDINR following broad-based weakness in the greenback and foreigners turning net buyers in the domestic equities and debt markets. In the near term, the pair is having resistance at 82.10 and support at 80.70.

* Reserve Bank of India also meets in the first week of Dec. Inflation remains higher than it would like but is showing some signs of peaking, while rates have already been raised a lot. It is not inconceivable that it will hike by only 25bp, less than the 35bp expected by the market.

* In 2022, the dollar index gained more than 10% amid rising interest rates and inflation and recession worries. The dollar index had its worst month since 2010, depreciating 5% against a basket of other major currencies. Talks of slower rate hikes and a cooldown in inflation lead to gains in the risk assets and a fall in the dollar index. The market is looking for 3Rsin (global) Recession, China Reopening and smaller Rate hikes. 

* December will be the busiest month as key central bankers meet to set the policy rate along with year-end rebalancing happening in many countries. Historically equities outperformthe year-end while the dollar falls.

USDINR Weekly Chart

Technical Observations:

* USDINR Dec fut is holding the support of 20 weeks simple moving average.

* It is also having upward-slopping trend support at 80.70.

* It has been forming a Bearish Head and Shoulder pattern on the daily chart with a neckline support of 80.70.

* Momentum oscillator, Relative Strength Index (RSI) 14 weeks exited from the overbought zone indicating weak momentum.

* MACD has been given a negative crossover and heading towards the zero line suggesting a bearish trend.

* USDINR Dec fut is having support at 80.70 and breaking of it confirms a bearish trend while on the higher side 82.50 remains resistance.

EURINR Weekly Chart

Technical Observations:

* EURINR Dec fut started forming a bullish chart pattern of higher tops and bottoms on the daily chart.

* Th pair is placed at an upper band of the Bollinger and heading north suggesting bullishness.

* It has been trading in ascending channels on the weekly chart.

* Momentum oscillator, RSI of 14 weeks has been strengthening and is about to enter an overbought zone suggesting bullish momentum.

* MACD has been heading higher and the MACD histogram forms bullish blocks indicating a positive trend.

* EURINR Dec Fut is expected to trade higher and any dips toward 82.50 can be bought for a target of 88 keeping a stop loss below 81.70

GBPINR Weekly Chart

Technical Observations:

GBPINR Dec fut touched the upper band of the Bollinger Band.

* It has started forming higher tops and bottoms on the daily and weekly charts.

* Momentum oscillator, RSI has been placed slightly above 50 on the weekly chart.

* MACD is placed above the zero line and the gap between MACD and MACD widened indicating a bullish trend.

* Looking at the above technical evidence, we believe one should hold the bullish bet and any dip towards 95.50 will be used to make a fresh long position keeping a stop loss below 94.

JPYINR Weekly Chart

Technical Observations:

JPYINR Dec fut formed the higher high on the weekly chart.

* The pair has also given a breakout from the downward-slopping trendline resistance.

* It has been placed at an upper band of the Bollinger band and well above the short-term moving averages.

* Momentum oscillator, Relative strength index of 14 weeks heading north and placed above 50 indicating a positive momentum.

* MACD has been placed above the zero line with positive crossover and histogram hinting continuation of an uptrend.

* Near-term bias for JPYINR Dec fut turns bullish. It has support at 59.25 and resistance at 65.

Dollar Index Weekly Chart

Technical Observations:

* Dollar Index closed below short-term moving averages and broke the 200 dayssimplemoving average support.

* It hassupport at 103.5, the lower band ofthe Bollinger band.

* Momentum oscillator, RSI of 14 weeks period placed below 50 and weakening indicating bearish momentum.

* Dollar Index is likely to trade lower with downside support around 100 and resistance at 109.

EURUSD Weekly Chart

Technical Observations:

* EURUSD is trading in the upward-slopping channel with resistance at 1.10.

* The pair has been placed well above short-term and mediumterm moving averages.

* Momentum oscillators and indicators heading north suggest bullish momentumand trend.

* The bias for EURUSD turned bullish with the downside support at 0.97 and resistance at 1.10.

GBPUSD Weekly Chart

Technical Observations:

* GBPUSD heading higher and about to touch the upper band of the Bollinger band.

* The pair has formed a higher high and could form a higher low before heading north.

* Momentum oscillator and indicators on the weekly chart look bullish.

* Near term view is bullish for GBPUSD with higher side resistance at 1.31 and support at 1.15.

USDJPY Weekly Chart

Technical Observations:

* USDJPY closed below 21 weeks moving average and heading towardsthe lower band of the Bollinger band.

* The pair hassupport at 130.75 and resistance at 140.75.

* Momentum oscillators and indicators showing signs of bearish momentumand trend.

* We believe USDJPY to trade lower and we could see a level of 130 in the coming weeks.

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