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Market Round-up

* Indian rupee marked the first weekly gain in three following rallies in the domestic equities backed by foreign fund inflows. The fall in crude oil prices and the expectation of a normal monsoon rain may drag inflation lower in the coming months. The month-end dollar inflows, the central bank’s intervention and lower crude oil prices could further support the rupee’s strength in the coming days.

* Spot USDINR fell 10 paise to 82.57 after touching three months high of 82.82 on Monday. The technical set-up remains bullish on the daily chart but we are expecting profit booking before heading towards a psychological level of 83. It has support at 82.30, the 100 days simple moving average.

* U.S. President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal to suspend the federal government's $31.4 trillion debt ceiling on Saturday evening but were unable to cheer market sentiments. The deal would suspend the debt limit through January of 2025 while capping spending in the 2024 and 2025 budgets.

* In the week gone, the combination of fix-related greenback buying and higher Treasury yields after the PCE print, and comments from the Fed’s Loretta Mester, has put the dollar nearing the two-month high. * US Treasury two-year yields climbed for an 11th straight session after data showed a pickup in inflation. The Federal Reserve Bank of Cleveland President Loretta Mester said she wouldn’t rule out another rate hike in June.

* Traders this week penciled in at least another quarter-percentage-point rate increase from the Fed in the June meeting. Fed funds futures traders are pricing in a two-thirds chance of a hike, up from about 18% a week ago.

* What to Watch: US markets are closed for Memorial Day. A note of caution and uncertainty will pervade the Fed’s Beige Book, with more districts likely expecting the outlook to deteriorate. May’s jobs report (Fri.) will present the Fed with its final opportunity to comment on the economy before the blackout period begins for the June 13-14 FOMC meeting.

USDINR

Technical Observations:

* USDINR June fut. has downward slopping trendline resistance at 83.10.

* The pair has been placed well above short-termmoving averages.

* Momentum oscillator, Relative Strength Index of 14 turned weak but remain above 50 indicating slower momentum.

* Short build-up has been seen as the price fell while open interest rose (Reference table on page 7).

* The bias remains neutral to bullish for USDINR June fut as long as it trades above 82.50, however, we don’t expect a level beyond 83.20.

USDINR June Futures Daily Chart

EURINR

Technical Observations:

* EURINR June fut. has been forming rounding top as shown in the chart.

* The pair has been placed well below short-termmoving averages.

* Relative Strength Index of 14 days oscillating near the oversold zone.

* MACD is placed below the zero line with a negative crossover.

* Short build-up has been seen as the price fell while open interest rose (Reference table on page 7).

* The formation of the “Doji” Candle near support indicates a short covering bounce before heading lower. The pair has support at 88.30 and resistance at 89.80.

EURINR June Futures Daily Chart

GBPINR

Technical Observations:

* GBPINR June fut has formed a bullish candle after the doji candle indicating bulls are still in the game.

* Relative Strength Index of 14 days oscillating below 50. MACD is about to go below the zero line.

* Short build-up has been seen as the price fell while open interest rose (Reference table on page 7).

* The near-term view for GBPINR remains cautious.

* The pair has support at 101.50 and resistance at 103.30

GBPINR June Futures Daily Chart

JPYINR

Technical Observations:

* JPYINR June futures trading in the bearish sequence of lower tops and bottoms on the daily chart.

* Relative Strength Index of 14 days aboutto enter the oversold zone

* MACD is placed below the zero line and weakening indicating a bearish trend.

* Short build-up has been seen as prices fell while the open interest declined. (Reference table on page 7).

* The bias remains bearish for JPYINR June futures with downside support at 59.50 and 58.70.

JPYINR June Futures Daily Chart

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