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Rupee Outlook and Strategy

• The US dollar index edged lower on Tuesday for a second time in a week as the global financial markets regained a measure of stability on hopes that a banking crisis can be averted. Meanwhile, better than expected CB consumer confidence number has limited the downside in the dollar

• Rupee future maturing on April 26 appreciated by 0.28% to 82.32 amid weakness in dollar and improved domestic equities

• The US$INR is likely to trade with a negative bias amid weakness in dollar and improved global risk sentiments. Further, expectation of weaker pending home sales data from the US could also weigh on the dollar. For the day US$INR, is likely to face resistance of 10 day SMA at 82.48 and dip towards the key 100 day SMA support at 82.10. Only a move below 82.10 would weaken the pair further towards 81.90-81.80

Euro and Pound Outlook

• The Euro extended its gain on Tuesday amid hawkish comments from the ECB member Muller. He said, “with inflation risk still skewed to the upside, there’s probably room to raise interest rates.” Further easing banking fears in the region have helped the pair to move above Friday’s highs of 1.084

• The Euro is expected to trade on a bullish note amid weakness in the dollar and improved risk sentiments. The EURUSD is hovering above the bullish cross over of 10 and 20 day EMA suggesting bullish bias. Additionally, the support from the oscillator RSI would also help the pair to resume its gain towards 1.09 mark. On the downside, 10 day EMA at 1.077 holds key support for the pair. EURINR (April) is likely to hold the support of 10 day SMA near 88.90 and move towards the target resistance at 89.60

• The pound moved higher for a second consecutive day this week as easing worries about a banking crisis revived investors' appetite. Further rise in 10 year UK bond yields to four day highs also supported the pair

• The pound is expected move in a sideways range ahead of today’s key FPC meeting minutes and statement. Immediate support for the pair is near 1.2270. On the upside 1.2380 would act as immediate resistance. The pair is still hovering between the mid and higher Bollinger band channel, which could support the pair to trade above key support at 1.2270. GBPINR (April) is expected to move in the range of 100.90 and 101.50. Only a close above 101.50 would bring fresh buying interest in the pair and push it towards 101.90

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