USDINR March futures took support at a lower line of downward downward-slopping channel - HDFC Securities Ltd
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The Indian rupee is expected to open slightly lower following recovery in the greenback after disappointing inflation numbers. The forward markets indicate spot USDINR opening at 82.79 atthe domestic bourses.
On Tuesday, spot USDINR gained a paise to 82.78. The price action remained lacklustre ahead of economic data. Looking at the Asian currencies, the pair is expected to head towards 82.90, while keeping the support at 82.65.
In India, the inflation rate was little changed last month, giving that country’s policymakers reason to remain cautious. CPI rose 5.09% from a year earlier, slightly higher than the median forecast of 5.04% in a Bloomberg survey of economists, and above the central bank’s 4% target. The rate was 5.1% in January.
US inflation topped forecasts for a second straight month in February as prices jumped for car insurance, air travel and clothes, bearing out the Federal Reserve’s cautious approach to cutting interest rates. The so-called core consumer price index, which excludes food and energy costs, increased 0.4% from January and 3.8% from a year ago. Overall CPI climbed 0.4% fromJanuary and 3.2% froma year ago.
The Fed is widely expected to hold interest rates steady for a fifth straight meeting when policymakers gather March 19-20.
Stocks in Asia were mixed as positive sentiment from another record session in the US was offset by wage talks in Tokyo, with early indications in favour of a Bank of Japan pivot. Equities in the US climbed to a fresh high as the inflation data did little to alter bets the Fed will cut rates at somepoint this year.
In other markets, oil advanced early on Wednesday after an industry report indicated stockpilesin the US decreased by 5.5 million barrelslast week.
Technical Observations:
USDINR March futures took support at a lower line of downward downward-slopping channel. However, the pair is closed below the short-term moving average of 21 days.
Momentum Oscillator, RSI of 14 days turned slightly up indicating a shortterm bounce.
Long buildup has been seen as the price and open interest gained.
Short Term Trend: Short Covering
Expected Trading Range: 83.05 to 82.70
Intraday Recommendation: Buy USDINR Mar. Fut. at 82.80 SL 82.70 Target 82.94
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