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Market Round-up

* The Indian rupee registered the biggest weekly decline in two-month following a rebound in the greenback against major currencies. A gauge of the dollar set its best weekly return since February as Treasury yields rose amid an uptick in bets that the Federal Reserve will step up its battle against inflation.

* Spot USDINR gained 37 paise to 82.17, in the week gone. The technical setup is about to turn positive once the level of 82.30 crosses. In the near term, the pair has support at 81.70.

* The greenback rally will likely persist this week, given the asymmetric setup around the US debt ceiling. US assets will be the primary beneficiaries if there’s meaningful progress toward a resolution. In contrast, a breakdown in talks will prompt global deleveraging that would support the dollar as the world’s reserve currency. A successful raising of the debt ceiling would permit this week’s packed line-up of Fed speakers to guide more hawkish, prompting higher yields and further dollar support

* Euro lost 1.5% last week, its worst performance in nearly two months, as yield spreads weigh on the common currency. The European Central Bank may have to continue raising borrowing costs beyond the summer, according to Governing Council member Joachim Nagel.

* Pound ended the week with a loss of 1.4%, the biggest weekly decline since March 10 after Bank of England Chief Economist Huw Pill said inflation has hit a “turning point” and is likely to slow, indication officials are thinking they might be able to pause their rate-hiking cycle; comments followed a weaker-than-expected reading of UK GDP.

* Apart from the routine economic data, this week the focus will be on Tuesday’s meeting of President Joe Biden, House Speaker Kevin McCarthy and other congressional leaders to discuss budget negotiations to avoid a default.

USDINR

Technical Observations:

* USDINR May fut. has 200 DMA support at 81.60 and resistance at 82.30, the 50 DMA.

* Momentum oscillator, Relative Strength Index of 14 days pierced above 50 indicating bearish momentum.

* Long build-up has been seen as the price and open interest rise (Reference table on page 7).

* The bias will turn bullish once the USDINR May fut crosses 82.30 while on the downside, 81.60 remains the strongest support. A fresh long position can be done above 82.30 for a target of 82.60 &82.90

USDINR May Futures Daily Chart

EURINR

Technical Observations:

* EURINR May fut. closed well below the short-termmoving average.

* Relative Strength Index of 14-day exited from the overbought zone and heading south indicating a weaker momentum.

* MACD is placed above the zero line but given a negative cross-over to its 9- day moving average.

* Long unwinding has been seen as the price and open interest decline (Reference table on page 7).

* The above technical evidence indicates a reversal for EURINR. The pair is likely to head towards 89 and 88.70 levels while 90.70 remains a short-term resistance

EURINR May Futures Daily Chart

GBPINR

Technical Observations : 

* GBPINR May fut closed below an upward-slopping trend line. The pair is closed below 10 DEMA.

* Relative Strength Index of 14 days placed above 50 but the direction turned bearish.

* Long buildup has been seen as the price rises along with open interest and volume (Reference table on page 7).

* There is a mixed signal from technical and derivative, we remain aside and wait for clarity. GBPINR May fut has support at 102.14 and resistance at 103.70.

GBPINR May Futures Daily Chart

JPYINR

Technical Observations:

* JPYINR May fut. formed a “Doji” candlestick pattern indicating indecisiveness. Itmanagesto close above the short-termmoving average.

* Relative Strength Index of 14 days hovering near 50 and flattening indicating a sidewaysto positivemomentum.

* Short covering has been seen as the price rises while open interest and volume decline(Reference table on page 7).

* The bearish bias in JPYINR May fut will turn bullish above 61.40. In the near term, it has support at 59.90 and resistance at 63.55.

JPYINR May Futures Daily Chart

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