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Rupee Heads For All-time Low Closing

* The Indian Rupee heads for the fourth weekly decline against the American dollar following a surge in crude oil prices and dollar demand from oil importers. The rupee has fallen over 10% this year and reached an all-time low of 82.22/$ on Thursday, even though the Reserve Bank of India continues to sell its forex reserves to defend the local currency.

* On Thursday, spot USDINR gained 37 37 paise or 0.46% to 81.89, the strongest closing after September 28. Technically, the pair is having resistance at 82.10 and support at 81.60. The near-term biasfor the pair remains bullish as long as it trades above 80.70.

* The World Bank cut India’s economic growth forecast by a percentage point, the mostfor a non-crisis economy.

* Stocks in Asia slipped as traders digested disappointing earnings that may foreshadow a wider decline in corporate profits. Uncertainty also increased ahead of US monthly payroll data. The drumbeat of hawkish comments from Federal Reserve officials keptstocks on the back foot for much of the US session, thwarting brief attempts to rebound. The rate will likely be 4.5% to 4.75% by spring, Chicago Fed President Charles Evanssaid.

* US equity contracts edged lower following declines for a second day on Thursday, with the S&P 500 and tech-heavy Nasdaq 100 both ending near session lows.

* The yen is once more weakening toward levels that triggered direct market intervention last month. The Japanese currency reached 145.01 per dollar in early trading Friday and was set for an eighth straight week of declines. It hit 145.90 per dollar on Sept. 22, triggering intervention from Japan that led to a near-4% intraday rally in the yen.

Technical Observations:

* USDINR October future given a breakout from a bullish flag pattern on Thursday. The pattern target comes around 84.

* The pair is having a near term resistance at 82.80, the band of the Bollinger band and support around 81.10.

* Momentum oscillator, Relative strength index of 14 days period is again turned positive and reclaimed the overbought territory indicating continuation of positive momentum.

* Fresh long position build up has been seen by the speculators as the pair touched the all time high with rise in open interest.

* USDINR is expected to trade within the narrow range in today’s session but the overall trend remains bullish with higher side resistance at 84 and support at 81.10

USDINR October Futures Daily Chart

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