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Market Roundup

* In line with stronger Asian currencies, Indian rupee is expected to open up. Implied opening from forwards suggests the spot USDINR may start trading around 83.04 as crude oil prices and yield decline on Tuesday.

* USDINR edged up 0.1% to 83.1900 on Monday amid month-end dollar demand from the importers and risk-averse sentiments.

* Though the pair has been trading between 83.30 and 83 since the start of the month, the recent price actions indicate the tiredness of bulls. Technically, USDINR has support at 82.90 and resistance at 83.30.

* Indian bond traders are set for a 240b rupee auction ($2.9b) of T-bills, today. The rupee may find support as crude oil prices ease over the last three days, a potential reprieve for net energy importer India. The India’s 10-year yields rose 2bps to 7.38% on Monday.

* A dollar gauge rose as US business activity picked up in October after back-to-back months of stagnation, while weaker data out of Germany and France weighed on the euro. The Dollar Spot Index rose 0.1% after three days of declines amid hedging flows ahead of month-end.

* Stocks in Asia pushed higher after President Xi Jinping stepped up support for China’s economy, buoying optimism.

* Treasury yields slid across tenors in Asia, with the two-year down six basis points. The dollar was weaker against all of its Group-of-10 peers.

* Elsewhere, oil edged lower, set to fall into a fourth session, on signs the Israel-Hamas war will remain contained for the time being.

* According to the CME FedWatch Tool, the odds of a 25 bps hike in December are still low, around 25%. In addition, the Tool suggests that a pause in November is near to being priced in. 

USDINR

Technical Observations:

* USDINR broke the support line after consolidating between 83.20 and 83.35 for the last 20 days.

* It has broken the upward-slopping trend line support of 83.30.

* Momentum oscillator, RSI has given negative divergence and placed below 50 indicating a weaker momentum.

* The pair has support at 82.50 and resistance at 83.40.

On Monday, the short covering was seen as the price gained while open interest declined.

Short Term Trend: Neutral/Bearish

Expected Trading Range: 82.90 to 83.25

Intraday Recommendation: Sell USDINR Oct. Fut. around 83.18 SL 83.30 Target 83.01. 

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