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Rupee Outlook and Strategy

* The US dollar index declined 0.61% on Friday as February jobs report diminished the hopes of further aggressive rate hike by the Federal reserve. The decline in wage growth numbers and rise in unemployment rate has weighed over the dollar. Further decline in US treasury yields most since Nov 2022 has pushed the dollar back to its March lows

* The rupee future maturing on March 28 depreciated to 82.14 amid weakness in domestic equities

* The rupee is expected to appreciate today amid weakness in the dollar as fear of 50 basis point rate hike in the March meeting diminished. The CME Fed watch toll suggests a 10% probability of a 50 basis point hike in the federal funds target against its Friday’s reading of 40%. US$INR is likely to face rejection near the 50 day EMA at 82.30 and decline towards the immediate support at 81.75

Euro and Pound Outlook

* The Euro extended its rebound on Friday as dollar slide to its lowest level in a week. Further, sticky German CPI numbers raised the hopes of increase in interest rates by ECB in its next policy. The German CPI rose by 0.8% MoM in February

* The Euro is expected to trade with a positive bias amid softness in dollar and expectation of tighter monetary policy from the ECB. The pair made a trend reversal double bottom near 1.052 and moved back above the 20 day EMA at 1.063, suggesting bull case. Further , formation of a bullish engulfing pattern will also support the pair. Hence, as long as it holds the immediate support at 1.052, the pair is likely to rise towards 1.0694. A move above 1.0694 would push the pair further towards 1.0790. EURINR (March) is likely to rise towards 88.10 as long as it holds the key support at 87.00

* The pound gained by almost 1.0% on Friday as surprise gain in UK GDP MoM has supported the pair to rise above the key psychological level of 1.20. Moreover, weakness in US dollar has also supported the pair to trade firm

* The pound is expected to rise towards 1.210 amid weakness in dollar. The pair is holding the support of 20 day EMA at 1.20 and is expected to move towards its previous weeks high at 1.21 level. The reversal in in the oscillator above the 50 mark will support the rebound. GBPINR (March) is expected to rise towards 99.40, as long as it holds above the key support at 98.00

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