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Rupee heads for best week in seven months

Indian rupee heads for the biggest weekly gains since August 28, 2020 as risk assets recovers and foreign fund outflows lose momentum. Foreign selling of India's stocks slowed in the past week as the nation's benchmark equity index rose and the Indian rupee strengthened. The 5-day moving average of net foreign outflows slowed to $89 million, compared with the 20-day average outflows of $105.9 million, according to data from the Central Depository Services (India) Ltd.

On Thursday, spot USDINR closed at 74.04 fell 33 paise or 0.44%, down for the fourth day in row. The momentum has been turned down after recovery in domestic equities.

Reserve Bank of India (RBI) on Thursday said it will be simultaneously buying and selling Rs 10,000 crore of secondary market bonds under its special open market operations programme. This is the first such 'Operation Twist' this fiscal in which the RBI will purchase long-term bonds and sell-short term bonds maturing this year.

From the data bucket, govt. to release March eight core industries output data which could show dip from previous -6.4%.

Asian stocks are poised to open lower Friday, after fresh all-time highs for the U.S. market as investors digested strong economic growth data. Risk sentiment was buoyed by data showing the U.S. economy expanded at a robust 6.4% annualized rate in the first quarter, while jobless claims fell to a fresh pandemic low.

The dollar gained as Treasury yields rose on expectations that resurgent growth will fuel inflation in the U.S. The U.S. dollar skidded toward a fourth straight weekly decline against a basket of major peers on Friday.

USDINR

USDINR May futures closed below 100 days simple moving average.

The pair has formed lower low with double top formation indicating weaker trend.

It has next crucial support at 74.08 and resistance at 74.70

Momentum oscillators and indicators turned weak on daily chart suggesting continuation of down trend.

The pair is expected to trade with negative bias and could show a level of 73.70, the double top pattern target, and expected to get resistance at 74.70, previous low.

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