USDINR October futures contact could open lower and expected to trade in the range of 82.10 to 81.70 - HDFC Securities
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Dollar Gauge May Extend Fall after Momentum Turns Weak
* The Indian Rupee is expected to open higher following an overnight pullback in the dollar index while major G-10 currencies gained against the greenback. The forward markets indicate spot USDINR could open around 81.65 and consolidate in the narrow range before theRBI Policy decision.
* India’s central bank is expected to increase its policy rate by half a point for the third time in a row as the currency’s plunge to a record low this month complicates the battle against inflation. Governor Shaktikanta Das may opt to dial up his hawkish rhetoric on Friday from his tone at the August meeting when he pledged to do “whatever it takes” to cool inflation that has stayed above 6% this year.
* On Thursday, spot USDINR declined 9 paise to 81.85 following strength in the Chinese Yuan. The yuan advanced in both onshore and offshore trading after a report that state-owned banks are preparing for intervention investors were also closing their long dollar positions ahead of a week-long holiday onshore.
* Spot USDINR is having resistance at 82.40 and support at 81.50 and 81.10. The pair could retrace in the near term as momentum oscillators turn weak on the daily and hourly chart.
* India’s external debt was placed at US$ 617.1 billion at end of June 22, recording a decrease of US$ 2.5 billion over its level on end-March 22. The external debt to GDP ratio declined to 19.4 per cent by end-June 2022 from 19.9 per cent by endMarch 22.
* Asian stocks dropped on Friday in the wake of another plunge on Wall Street as the prospect of higher interest rates and turmoil in Europe stoked fears of a global recession.
Technical Observations:
* USDINR October futures formed a Doji Candlestick pattern slightly below an upper band of the Bollinger Band which is considered as reversal and confirmation of the same will come below 81.74.
* The pair is having support at 81.10 and 80.55 while on the higher side it has resistance around 82.50.
* Momentum oscillator, Relative strength index of 14 days period about to exit from an overbought zone.
* Short build-up has been seen with a fall in price and a rise in open interest.
* Medium-term trend remains up as long as it breaks the level of 80.55.
* USDINR October futures contact could open lower and expected to trade in the range of 82.10 to 81.70.
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