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Rupee Calms for Now

Indian rupee poised for a steady start await for cues from US inflation data and central bank stimulus amid the recovery from the pandemic. Rupee has been trading in small range with lower volume since last couple of trading sessions as the carry premium declines, foreign fund inflows stabilises and virus cases moved southwards.

One month forward USDINR quoted 6 paise higher from yesterday’s 5pm indicating positive opening for the pair at domestic bourses.

On Tuesday, spot USDINR closed at 72.89 with gain of 8 paise or 0.11%. The momentums remained sluggish in absence of fresh triggers. Technically, it has resistance at 73.30 and support at 72.70.

Asian stocks look set for a mixed open as U.S. equities traded near a record ahead of key inflation data. The S&P 500 ended little changed just shy of its May 7 record close. The dollar edged moderately higher, marked for its first gain in three sessions. Last dollar index quoted at 90.09 almost unchanged from overnight close.

The focus remains on Thursday’s report on U.S. consumer prices, which may affect perceptions of when the Federal Reserve is likely to start discussing tapering asset purchases. The dollar advanced for the first time in three days, while oil resumed its rally to top $70 a barrel.

Strong rally in the Treasury complex pushed the 10-year yield to a near two-month low at 1.53%. The Fed’s message that inflation is transitory is starting to stick. Treasury yields fell to a onemonth low Tuesday, driven by a decline of breakeven rates, even as the inflation report and supply pressure loom.

US Senate passed an expansive bill to invest almost $250 billion in bolstering U.S. manufacturing and technology to meet the economic and strategic challenge from China.

USDINR

USDINR June futures formed small doji candlestick patter after bearish candle indicating indecisiveness.

Broadly the pair has been consolidating between 73.50 to 72.70 range.

It has been getting resisted at 21 DEMA.

Momentum oscillators and indicators remained weak suggesting continuation of weaker trend.

USDINR June futures has support at 72.70 and breaking of the same will open for 72.40 while on higher side 73.36 remains key resistance.

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