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Markets Gearing Up For Quarter End Adjustment -  HDFC Securities 

* Market is gearing for quarter end adjustment with expectation of profit booking in riskier assets and recovery in safe haven. Asian currencies can come under-pressure if dollar index surpasses the August high of 93.75 following rising bond yields.

* Spot USDINR ended week with gains of 21 paise to 73.69 following strength in dollar index and foreign fund outflows from equities. Technically, the pair is having resistance at 73.85 and 74.10 while strong support at 73.40 and 73.25.

* India's foreign exchange reserves declined by $1.47 billion to $639.642 billion in the week ended 17 September, the Reserve Bank of India (RBI) data showed on Friday.

* The Evergrande saga engulfed global markets, while the Fed gave a clearer picture on its tapering plan. All these events fueled volatility in global markets with moods swinging from risk-off to risk-on. Global equities manage to rebound and ended the week on positive notes while dollar also recovered following weakness in pound and yen. The dollar climbed, while Treasuries extended losses as the US 10-year yield reached the highest since July. Brent crude futures posted a third straight week of gains amid global output disruptions and inventory draws, but the rally was slightly dampened by China’s first public sale of state oil reserves.

* CFTC Date: In FX, flows were substantial and skewed toward dollar buying. The notable flows were sales of euros (15.7k) and CAD (18.6k), though specs also sold sterling (5k), Swissie (3.3k) and AUD (2.2k.) The short in Aussie is now a record in contract terms (85.6k, or AUD 8.5 billion). The aggregate dollar long increased by more than $4 billion on the week.

USDINR

* USDINR October futures formed “Doji” candlestick pattern on daily chart indicating indecisiveness .

* USDINR October futures formed “Doji” candlestick pattern on daily chart indicating indecisiveness .

* USDINR October futures formed “Doji” candlestick pattern on daily chart indicating indecisiveness .

* The pair has resistance around 74.60, the downward slopping trend line resistance on daily chart.

* Momentum oscillator, relative strength index has been heading towards north but still remained below 50 levels.

* Momentum indicators also steady around breakeven line indicating consolidation.

* USDINR October future expected to trade in the range of 73.30 to 74.60 and directional trend can only after given range breakout.

EURINR

* EURINR October futures has been trading in downward slopping channel indicating continuation of bearish trend.

* The pair has centerline resistance and 20 days simple moving average resistance at 87.10.

It has been facing stiff resistance at 50 days simple moving average at 87.73.

* Momentum oscillator, relative strength index has given positive divergence but price confirmation yet to be confirmed for trend reversal.

* ADX line of Directional Movement Index heading higher with –DI placed above +DI indicating continuation of bearish trend.

* EURINR October futures expected to continue down trend until it trades above 88 while on downside breaking below 86.60 open new lower range. Breaking below 86.60 drags the pair towards lower trend line towards 86 odd levels.

GBPINR

* GBPINR October futures reversed after touching 20 days simple moving average currently placed at 102.55.

* The trend remains bearish as it has been trading well below medium and short term moving averages.

* Breaching of 100.78, previous bottom negates the higher top higher bottom formation on daily chart we could see pair falling below psychological level of 100.

* Momentum oscillator, RSI placed below 50 with negative cross over indicating continuation of down trend.

* GBPINR October futures expected to remain under-pressure and any rally towards 102.50 or breaking below 100.78 used as fresh short selling opportunities. The trend remains down until it crosses level of 102.75.

JPYINR

* JPYINR October futures retraced from 50 days simple moving average and fell below short term moving average of 20 days.

* The chart formation remains bearish amid lower top lower bottom sequence on daily and weekly chart.

* The pair has long term trend line resistance around 67.75 and multiple bottom support around 66.50.

* Momentum oscillator, Relative Strength Index on daily chart turned down with negative cross over indicating bearishness.

* ADX line has been placed at 13 and weakening indicating weaker trend.

* JPYINR October futures expected to trade with negative bias following bearish chart formation. However, it has strong support at 66.50 and resistance at 67.75.

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