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USD/INR

Market Commentary:

* The Dollar fell to a one-month low as softer than expected retail sales data saw traders bolstering their bets for Fed rate cuts – the market is now predicting two rate cuts before year-end from one earlier. The US 10-year yield fell to 4.34% and closed at the lowest point of the day in a sign of weakness for rates; earlier, the USD/INR ended lower in another day of low volatility.

* Yesterday’s turn lower has seen the pair close under the 5-day EMA; it remains above the 13- and the 21-day averages even as the larger grind higher has the looks of a rounding top. Support for the day may be seen near 83.44/30/20 while resistances are placed near 83.53/57/64.

* Daily stochastics are bullish but overbought, so caution is advised on longs. Notable strikes due to expire today are 83.38 and 83.71.

* Bloomberg’s FX forecast model suggests there is a 4.7% probability that the pair will touch 83.64 while there is a 28% chance that it will hit 83.30

EUR/INR

Market Commentary:

* The slump in the greenback saw the EUR/USD break two important trendline resistances and the 100-day average. That boosted the INR cross too, which rose to its highest level since early April.

* For the day, the pair is expected to find support near 90.00, while near-term resistance can be seen within the 90.60 – 90.70 area. Note that prices are trading above all the short-term EMAs.

* Notable strikes set to expire today for EUR/USD lie at 1.0850,1.0875 and 1.0900.

* Daily stochastics are bullish, but both the oscillator lines are significantly overbought.

* Bloomberg’s FX forecast model suggests there is a 9% chance that the pair will touch 91.07 today while there is a 32.5% probability that it will reach 90.05.

GBP/INR

Market Commentary:

* The pound drifted higher as the dollar fell in what was otherwise a quiet day for UK economic releases. The pair tested a high of 1.2685, which pushed the INR cross above the 105 handle.

* Technically, the 104.80 - 104.66 area - the short-term EMAs are clustering here - is expected to serve as a support area. Immediate resistance lies near 105.50 followed by 106.00. Pattern-wise, yesterday’s breakout has confirmed a bullish reverse head-and-shoulders formation, whose upside objective lies around 107.50.

* Notable strikes set to expire today lie at 1.2610, 1.2615 and 1.2710.

*  The stochastics oscillator formed a bullish crossover and looks primed to go overbought.

* Bloomberg’s FX forecast model suggests there is a 11% probability that the pair will touch 106.00, while there is a 30% probability that it will hit 105.03.

JPY/INR

Market Commentary:

• The slump in the greenback post the CPI and retail sales numbers saw the JPY appreciate hard. The currency recorded its biggest two-day gain against the dollar since May 3. That led to a rather swift reversal in the JPY/INR, after the recent streak of losses.

* Immediate support for the pair lies around 0.5390, followed by 0.5375 and 0.5340 while upside hurdles lie between 0.5425 and 0.5475.

* Notable strikes set to expire today are at 154.00, 154.40, 155.00, 155.05

* The daily stochastics oscillator has swung up and turned positive just above 50, bolstering the scope for an extended rally in the pair should the yen continue to rally against the USD.

* Bloomberg’s FX forecast model suggests there is a 20% probability that the pair will hit 0.5424 while there is a 9% probability that the pair will reach 0.5340.

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