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Fundamental Update

The US Dollar continued to trade on a positive note during the previous week. The Dollar index after finding support near 99.50 levels mid-July witnessed a strong rally towards the 103 mark supported by stronger employment data in July and decline in the Pound sterling. The USDINR pair currently remains near the 82.70 mark, it could continue trading between 82.95 - 82.50 levels.

The Dollar faced selling pressure after data showed lower than estimated nonfarm payrolls data in July at 187K against estimates of 200K. For the week, market participants will be closely watching key data points like the CPI numbers from China, US and India along with RBI’s Interest rate decision. The USDINR pair is expected to trade in a range between 82.95 & 82.50.

The US 2 year yields, currently at 4.84 levels with a previous high of around 5.12 might result in the pair drift towards the support of 82.50 levels. With Crude prices currently holding above the $85 levels and having a positive correlation on the USDINR pair, we expect the pair to remain range bound with a base around 82.50 levels.v

With strong support near 82.50 levels, the USDINR pair might remain range bound between 82.50 – 83.00 levels and only a breach beyond this might result in further direction in the short term.

USDINR Derivative Summary

Highest Call writing for the August monthly series can be seen around the 82.50 strike followed by the 83.00 strike.

Significant Put writing for the August monthly series can be seen around the 82.00 strike followed by the 82.50 strike.

Derivative data suggests range bound movement with a 0 negative bias. Expected range 82.00-83.00.

USDINR Technical Outlook

The USDINR pair after rallying towards 82.90, the highs of its 11 month range again witnessed some profit booking and reversed towards the 82.70 levels and is now consolidating. The short term trend in the pair remains sideways with 82.50 which would be the key support and only a close below which might see the pair face further weakness in the short term. On the higher side, 82.90-83.00 is something which the pair faces difficulty in crossing.

Biasness for this week is expected to be sideways as the pair faces stiff resistance towards 82.90-83.00 levels.

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