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Market Roundup

The Indian rupee will start the week on a mute note after a long week-end. Indian forex market was closed on Monday on account of “Shivaji Jayanti”. The recovery in the Chinese currency after the PBOC rate cut could support the rupee in opening trade but the risk-averse moods, higher crude oil prices and foreign fund outflow will continue to weigh on the local rupee

Implied opening from forward suggests spot USDINR may start trading around 83.03.

On Friday, spot USDINR closed with a loss of 3 paise to 83.015. The pair traded in a tight range of 83.15 to 82.90 in the prior week. Going ahead, we expect the consolidation could further extend as there is a lack of fresh triggers for directional trends.

Chinese banks cut a key reference rate for mortgages by a record amount. The five- year loan prime rate was lowered by 25 basis points to 3.95%, according to a statement by the People’s Bank of China on Tuesday. That was the first cut since June and the largest reduction since a revamp of the rate was rolled out in 2019. The one-year loan prime rate was maintained at 3.45%.

Oil held near the highest level in more than three months following another Houthi strike on a commercial ship in the Red Sea. The crew abandoned the vessel, the first such evacuation since the militant group began menacing trade late last year.

Markets await fresh drivers to continue timing the start of the Fed’s easing cycle. FOMC’s January meeting minutes are due on Wednesday.

Technical Observations:

USDINR February futures closed slightly below 10 DEMA. The 10 DEMA is placed below 21 DEMA.

Momentum Oscillator, RSI of 14 days period is placed below 50. MACD has been placed below a zero line.

The pair has been lacking direction and oscillating around short-term moving averages.

Minor short buildup has been seen as price fell while open interest gained. Short Term Trend: Sideways Expected Trading Range: 83.15 to 82.82

Intraday Recommendation: Sell USDINR Feb. Fut. below 82.95 SL 83.07 Target 82.81

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