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Rupee Outlook and Strategy

• The US dollar gained 0.24% on Wednesday on optimism about a deal to extend the debt ceiling and avert US default. Further, improved economic numbers and hawkish comments from the fed members suggests rate cuts from Federal Reserve could come later. Further jump in 10 and two year treasury yields to two-week highs supported the dollar

• Rupee future maturing on May 29 depreciated by 0.19% on Wednesday amid strong dollar and rise in crude oil prices

• The rupee is likely to depreciate amid a firm dollar and surge in crude oil prices. Additionally, investor will remain cautious ahead of Fed member’s speech and US jobless claims number to get hints on the future rate trajectory. For the day, US$INR is expected to rise towards 82.60 as long as it holds above 82.20

Euro and Pound Outlook

• The Euro declined almost 0.24% on Wednesday amid strong dollar. However, losses in the pair was limited on hawkish comments from ECB Governing Council member Rehn. He said that the ECB should continue raising rates until core inflation declines

• The Euro is expected to remain under pressure and move towards 1.0810 on firm dollar. The weakness in the oscillator RSI (40) would restrict any upside momentum and push the pair towards 1.0810. The 50 day EMA at (1.088) would act as immediate resistance to the pair. EURINR is expected to face the resistance near 89.70 and slide towards immediate support of 89.10

• The pound witnessed a strong rebound after BoE Governor Andrew Bailey sounded hawkish. He said that the central bank will not flinch from hiking rates further if needed

• The pound is expected to face the hurdle near 1.2530 and move back towards 1.2440 amid strong dollar. The pound is trading below the 20 day EMA at 1.2530, which could act as key resistance. On the downside 1.2440 holds as immediate support. The RSI also suggests sideways trend as it remain near the neutral zone 50. GBPINR is expected to face the resistance near 103.20 and slid towards 102.50

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