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Market Roundup 

As the end of September looms, there’s growing concern about rising yields, the surging dollar, sour risk sentiments and the strength of the US economy, which will feed into Asian markets for the rest of the week. Back home, spot USDINR is expected to open slightly up following strength in the neighbour currency but as the day progresses we could see strength in the greenback.

On Tuesday, spot USDINR gained 9 paise or 0.11% to 82.24, registering strength for the second day in trot amid higher crude oil prices, month-end dollar demands and foreign fund outflows.

Asian stocks traded mixed as investors contemplated a protracted period of higher interest rates. The MSCI All Country World Index, one of the broadest measures of global equities, edged lower for a ninth day, heading for its longest losing streak in more than a decade.

The dollar advanced for a fifth day, while the Swedish krona was the only Group-of-10 peer to gain versus the US dollar while the yen edged toward 150 per dollar. The Dollar Spot Index rose 0.3%, in the longest winning streak since mid-August.

The Japanese yen little changed at 149, in a choppy trading session that saw the pair top 149 for the first time since October. Japanese Finance Minister Shunichi Suzuki said he’s watching foreign exchange moves “with a high sense of urgency”. The pound slips 0.4% to 1.2164, heading for its fifth day of losses for the first time in two months.

In commodities, oil resumed its climb, moving back above $90 a barrel, as the effect of rapidly tightening supplies outweighed a weakening risk appetite in broader markets.

One Fed speaker after another in the past week has delivered emphatic messages that they will keep policy tighter for longer if the economy is stronger than expected. The Fed’s hikes have hit consumer sentiment which dropped to 103 from a revised 108.7 in August, missing the median estimate of 105.5

Senate Republican and Democrat negotiators are nearing a deal on a short-term spending measure intended to keep the government open after Oct. 1, according to a person familiar with the talks.

 Technical Observations:

USDINR Oct fut. has been placed well below the short-term moving average of 21 days.

Momentum Oscillator, RSI of 14 days period is placed below 50 and strengthening on the daily chart.

The spread between –DI and +DI is getting narrow while the ADX line is floating above 25 exhibiting a positive trend.

Long buildup has been seen as price rises along with open interest

Short Term Trend: Bullish

Expected Trading Range: 8.20 to 83.55

Intraday Recommendation: Buy USDINR Oct. Fut. between 83.25-83.20 SL 83.10 Target 83.55

Option Strategy: Sell USDINR 27 Oct. 84 CE at 0.1275 and 82.50 PE at 0.06 (Net Inflows 0.1875) Stop Loss 0.2875 (Till Expiry)

USDINR Oct Futures Daily Chart

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