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Market Roundup 

The Indian rupee is likely to open little changed with the rise in oil prices and U.S. Treasury yields countered by expectations that the Reserve Bank of India will not allow the currency to slip. Implied opening from forwards suggests the spot may start trading around 83.26. Spot USDINR little changed at 83.26 on Tuesday. Technically, the pair has been trading in a tight range of 83.10 to 83.30 since the start of the month. We expect the pair may continue to trade in the said range for a few more days. Asia stocks struggled for direction while US futures fell, following Wall Street, where bonds slumped after the hot retail data. The BOJ announced a surprise bond-buying operation as benchmark yields climbed to a decade high and the yen held near its key 150 level. US Treasury yields surged as retail sales beat all forecasts and industrial production rose with the new highs threatening repricing across markets. The two-yield hit levels not seen since 2006 as investors judged another Fed rate hike is more likely. Chinese currency appreciated after upbeat economic data. China’s economy found a foothold in the third quarter as the government increased support and consumer spending picked up, while the property market remained a drag. Gross domestic product increased 4.9% in the July-September period from a year prior, data released by the National Bureau of Statistics showed Wednesday. Oil rallied as the deadly explosion at the Gaza hospital boosted tensions before Biden’s arrival in the region. WTI rose above $88 a barrel, after swinging by more than $2 on Tuesday. Back to geopolitical events. President Joe Biden’s dramatic war-time visit to Israel and Jordan began to unravel even before he left the ground after an explosion at a Gaza hospital left hundreds dead and Arab leaders pulled out of a meeting planned for the trip.

USDINR

Technical Observations:

USDINR Oct fut. has been hovering near 10 DEMA since the start of the month.

It has been holding the support of 21 DEMA.

Momentum Oscillator, RSI of 14 days period is placed above 50 and flattening suggests lackluster momentum.

MACD has been placed above the zero line and histogram bars are small indicating a weak up trend.

Long unwinding has been seen as price along with open interestfell.

Short Term Trend: Neutral

Expected Trading Range: 83 to 83.35

Short Term Recommendation: Buy USDINR Oct. Fut. ONLY above 83.40 SL 83.28 Target 83.59 

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