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Rupee likely to open flat following lackluster trade in Dollar index

Rupee expected to open flat following listless trading activities in other Asian currencies. The one month forward USDINR last quoted 2 paise higher from yesterday’s 74.46 level while dollar index hovering below 92 level. Asian stocks look set for a mixed start after the reflation trade fizzled in the U.S. amid new travel curbs in some parts of the world.

On Monday, spot USDINR closed at 74.19 unchanged from Friday’s level. Technically, spot USDINR is having support around 74 and resistance at 74.50. In near term, the pair is expected to consolidate with overall bullish view until 73.70 breaks.

The yen topped the leaderboard for the Group-of-10 currencies, with the dollar paring gains as U.S. Treasury yields declined and traders rebalanced portfolios for month-end on Monday. The euro was steady, while the relative premium to own exposure on the common currency over the next two months is at its lowest cost in more than a year and at levels rarely seen.

U.S. dollar can build on its recent gains into the third quarter in part because the U.S. can make the most of the largest open domestic economy, when much of the world still has restricted travel. That will help to maintain a strong flow of funds into U.S. equities and fixed income, which will support the dollar.

Former US Treasury Secretary Robert Rubin said there’s a “material risk” that the U.S. could see persistently elevated inflation and urged policy makers to be careful to avoid overheating.

Oil was steady near a two-year high ahead of an OPEC+ meeting at which the alliance is forecast to announce supply increases that won’t be enough to keep pace with the global demand recovery,

USDINR

USDINR July futures has resistance at 74.70, the 50% Fibonacci retracement level adjoining recent swing from 76.40 to 73.

It has formed bearish engulfing candle with open =high and close= low.

However, the pair still holding higher highs and lows and sustaining above short term moving average.

Momentum oscillators and indicators placed above breakeven line indicating bullishness.

USDINR July futures has support at 74.20 and resistance at 74.70. The pair is expected to remain range bound with overall bullish trend.

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