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Market Roundup

The Indian rupee is likely to open higher after the last two day’s weakness versus the dollar amid lower US treasuries and the dollar index. The uptick in the Asian currencies and anticipation of dollar inflow from green bond issuance could support the rupee in today’s trade. The forward market implies USDINR could open around 81.65 atthe domestic bourses

On Tuesday, spot USDINR gained 33 paise to 81.72, marking the second day of gains in a row. The dollar demand from the oil importers and bargain buying from the traders pushed the pair higher after breaching the psychological level of 81 on Monday. Technically, the pair hasresistance at 82.10 and support at 81.40.

Indian bond traders will look forward to the nation’s first sovereign green bond auction, including 5- and 10-year tenors. A 290b-rupee ($3.5b) Treasury bill sale is also scheduled. 10-year yieldslittle changed at 7.35% on Tuesday

The dollar slipped against its peers amid lower Treasury yields following a solid two-year note auction, a series of purchasing managers indexes and US earnings reports. The greenback largely tracked changes in Treasury yields after US data, though the impact of corporate hedging flows was also evident.

Asian stocks struggled to find traction on Wednesday while US and European equity futures slumped as a downbeat revenue forecast from Microsoft Corp. added to risk aversion in global markets. Hong Kong and mainland China markets remain closed for the Lunar New Year holiday.

Elsewhere, Oil rose after a drop on Tuesday and gold inched higher to extend recent gains, pushing the precious metal to the highestlevel since April.

USDINR

Technical Observations:

USDINR January reclaimed the 10-day exponential moving average resistance and supertrend line on the daily chart.

However, the trend remains weak as long as it starts forming higher tops and higher bottoms.

The pair has resistance at 82.10, the 20- day simple moving average and support at 80.90, the recentswing low

Momentum oscillator, Relative Strength Index of 14 days period has given positive divergence on the daily chart and heading north indicating the short-term positive momentum.

The derivative data shows a short covering as the price gained while open interest and volume rises.

USDINR January fut. could trade lower in today’s trade with downside support at 81.40 and resistance at 81.90.

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