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Rupee Likely To Open Lower On Risk-off Moods - HDFC Securities

Indian rupee expected to open with minor loss following rebound in dollar index after four days of weakness and seesaw movement in risk assets. Asian currencies to enter in a period of reduced liquidity with an upward bias, partly because of a dovish Jerome Powell speech overnight, US subdued inflation data and many Asian markets enjoying Holiday

Rupee in line with other Asian peers gained on Wednesday following weakness in greenback and stronger risk appetite. Rupee closed at 72.85 with the gain of 4 paise a dollar. Near term bias remains bullish for rupee and we expect it can touch the level of 72.70 in next couple of days while on lower side 73 will act as support

Asian stocks are poised to churn lower Thursday as investors assess what the latest U.S. inflation reading means for aid prospects, and with some major markets closed for holidays. China is shut for the start of Lunar New Year celebrations, and Japan and South Korea are also closed.

On Wednesday, the dollar fell for a fourth day and American shares rose amid optimism that Congress may pass the aid bill to boost growth. Federal Reserve Chair Jerome Powell reiterated the need for both accommodative monetary policy and more fiscal stimulus to support the economic recovery. . The 10-year Treasury yield fell back below 1.15% after the core consumer price index was unchanged last month. Elsewhere, WTI crude edged toward $58.50 a barrel to log its eighth straight green finish,

A key measure of prices paid by U.S. consumers was unchanged in January for a second straight month, underscoring the pandemic’s lingering restraint on inflation that financial markets see heating up.US January consumer price index showed a 1.4% annual increase for both the headline and core (excluding food and energy) metrics, below the 1.5% consensus for each.

USDINR

USDINR February futures formed inside bar after forming doji candlestick pattern suggesting continuation of consolidation with bearish bias.

The pair has been facing resistance at 20 hours moving average which is currently placed at 73

Momentum oscillator, RSI heading towards south suggesting downward momentum.

The pair is having support at 72.70 and resistance at 73.10.

We remain bearish in USDINR Feb. Fut. and expecting it could touch level of 72.70 in next few days.

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