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Market Roundup

* The Indian rupee is expected to open flat ahead of the RBI monetary policy decision. However, the broad-based weakness in the dollar and gain in risk assets mightsupportthe rupee to recoversome lost ground in today’strade

* The forward markets indicate USDINR could open around 82.70 at domestic bourses.

* On Tuesday, spot USDINR fell three paise to 82.70 after witnessing a sharp sell-off in the previous session. The foreign fund outflows, recovery in crude oil prices and weaker regional currency all added strength to the pair. Technically, it has resistance at 82.80 and support at 82.40. A rally can be seen once the level of 82.80 crosses.

* RBI is expected to deliver a 25 basis points increase in the repurchase rate to 6.5% in today’s policy meeting after RBI Governor Das pointed to sticky core inflation. The hiking cycle has brought 225 basis points of tightening since last April.

* The dollar pared about half its losses Tuesday after Fed Chair Powell noted it will take time to reach the 2% inflation target and that further rate hikes may be needed.

* Stocks in Asia edged higher Wednesday following a late rally in US shares in a volatile session after Federal Reserve Chair Jerome Powell highlighted that disinflation has begun and that further hikes will likely be needed if the jobs market remainsstrong.

* Elsewhere in markets, the price of oil rose further after a 4.1% surge on Tuesday, its biggest one-day move since November, helped along by a rebound in demand fromChina.

USDINR

Technical Observations:

* USDINR February futures formed the “Doji Candlestick” patterns implicating indecisiveness among traders.

* The pair has downward slopping trend line resistance at 83.18, coinciding with the 61.8% Fibonacci extension level adjoining recentswing highs and lows.

* It has support at 82.20, the 10-day exponential moving average.

* Momentum oscillator, Relative Strength Index is hovering around 60 and heading north, a sign of positive momentum.

* The derivative data saw minor unwinding in a buy position ahead of events as price and open interest declined marginally.

* In the near term, USDINR February futures could trade volatile between 83.20 to 82.70.

USDINR February Futures Daily Chart

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