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Market Roundup

* The Indian rupee is expected to open slightly lower following a stronger dollar index and foreign fund outflows. The month-end dollar demand from importers and speculative position unwinding will weigh on the local unit in today’s trade. The forward market suggests spot USDINR opening at 83.18 from the previous close of 83.15.

* On Monday, spot USDINR gained 21 paise or a quarter percentage to 83.15 amid riskaverse moods and foreign fund outflows from domestic equities and debt. Our view remains bullish for the pair as long as it holds the support of 82.80 while on the higher side, we believe 83.25 to 83.30 remains a major hurdle to cross.

* Asia stocks fell, following US futures, while European contacts were mixed. The dollar hovered near 10-month highs against a basket of major currencies, supported by U.S. bond yields scaling 16-year peaks, while the yen tiptoed deeper into the intervention danger zone. The U.S. dollar index touched its highest since November at 106.1. The upbeat economic data, hawkish Federal Reserve rhetoric, and a budget deficit to be financed by borrowing have pushed the 10-year Treasury yield up more than 45 basis points in September to top 4.5% for the first time since 2007.

* US stocks managed to snap a four-session losing streak with the S&P 500 settling higher by 0.4%. Elsewhere, Oil prices slipped in early trade on Tuesday amid concerns that fuel demand will be crimped by major central banks holding interest rates higher for longer, even with supply expected to be tight.

* Investors will be mulling this week’s comments from Federal Reserve officials as concern grows over the potential for a US government shutdown.

* A US government shutdown would reflect negatively on America’s credit rating, according to Moody’s Investors Service, the only remaining major credit grader to assign the US a top rating.

* U.S. consumer confidence and home sales data is due later on Tuesday, with slight weakening seen on both fronts though doubts that that could much dent the dollar

Technical Observations:

USDINR Oct fut. rebounded and came back above the short-term moving averages.

The pair held the support of recent swing lows at 82.80.

Momentum Oscillator, RSI of 14 days period is placed below 50 and turned upward on the daily chart.

ADX line is placed above 25 and strengthening indicating a positive trend.

Long buildup has been seen as price along with open interestrise.

Short Term Trend: Bullish

Expected Trading Range: 83.10 to 83.45

Intraday Recommendation: Buy USDINR Oct. Fut. between 83.15-83.10 SL 83.00 Target 83.42 

USDINR Oct Futures Daily Chart

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