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Stronger Regional Peers to Support Rupee

* The Indian Rupee is expected to open higher following weakness in the dollar index and rebound in regional currencies as risk-assets surge. The forward USDINR was last quoted at 82.44 which is 67 paise down from Tuesday’s 5 pm, ETD markets close time.

* On Tuesday, spot USDINR closed at 82.73 with gains of 4 paise. Domestic Forex markets were closed on Wednesday. The bulls are exhausted arou83-odd levels in the last couple of days indicating weakness in the pair the in coming days. However, for the trend reversal, the pair needs to close below 81.90 while on the higher side 83 remains near-termstrong resistance.

* Global equities advanced Thursday as Chinese shares extended a rebound and US stock futures overcame earnings worries from tech giants. The yield on 10-year Treasuries was back near the key 4% threshold

* The euro’s rally may have more room to run should leveraged funds covering short-term positions propel the currency past its September high. Its fortunes may be changing after it bullishly broke out of this bias Wednesday, opening the door to further gains, particularly if short-covering propels it above $1.0198, a level last seen on Sept. 12.

* Investors will be focused on how the currency reacts to the European Central Bank policy decision on Thursday, given that euro-area inflation rose to a record 9.9% last month.

* The yen is seeing a respite fromrecent heavy selling as tradersreconsider the pace of US rate hikes and prepare for Friday’s key Bank of Japan policy decision. It climbed to 146 per dollar in Asian trading Thursday, its highestsince Oct. 11. It has rallied some 4% from a three-decade low reached Friday, when suspected intervention fromJapan drove it higher fromjust under the 152 level.

Technical Observations:

* USDINR November futures took support at 13 days exponential moving average support.

* Momentum oscillator, relative strength index of 14 days period exited from the overbought zone.

* MACD has given a negative crossover and histogram bars turned flat indicating weakness in the trend.

* Long build-up has been seen on Tuesday with a rise in price and open interest while the volumes declined amid the holiday. The rise in open interest was on the back of expiry-related rollover.

* USDINR Nov. fut. Is expected to open lower today and could fall further after October contracts settle. The pair is having support at 82.08 and resistance at 82.85.

USDINR November Futures Daily Chart

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