Expert View: Rupee outlook on Monday

Last Updated: Tue, Nov 06, 2012 11:59 hrs

Market Recap:

Nov USDINR closed at 54.09, up 11 paise. USDINR ended at 53.80 from 53.70 and traded the range of 53.67-53.87. After a weaker opening, USDINR drifted higher with dollar demand from oil and precious metals dominating dollar sales by exporters. Weaker EURUSD and uncertainty ahead of US Oct NFP data later in the day too led to trimming in short USDINR positions.

On options front: Nov 2012: Showed substantially high Put option open interest buildup at 54.00 strike with +215k contracts. Maximum Call option open interest buildup is at 54.00 strike with +244K contracts .Put options with strike 54.00 saw maximum increase in OI for the session at +12K contracts, while those with strike at 54.50 saw sharpest decline in OI by 21K contracts. Call options with 54.25 strike saw maximum increase for the day at +18K contracts and those with strike at 55.00 saw sharpest decline in OI for the day by 31K.

Overseas, caution ahead of the Oct NFP data in US and concerns over Greece supported risk aversion. Greek Supreme Court of Audit had said that the planned pension cuts and changes to the retirement age sought by the ECB/IMF/EC troika may be unconstitutional, and this was followed by a Greek finance ministry official comments that such an opinion is not binding on the Greek government. These reports added to the uncertainty over the implementation of austerity program by Greece as demanded by the troika and a possible delay in the disbursement of next financial aid tranche to the Hellenic nation. During the European session, the final Oct PMI readings was mixed and pointed to the continuance of sluggish growth momentum.

In US session, Oct NFP data showed strong overall and private sector jobs addition. However average hourly earnings and hours worked data was weaker than expected. As US stocks faltered after a brief post NFP spurt, risk aversion grew stronger and supported US dollar.

EURUSD: Closed at 1.2837 from 1.2942 traded in 1.2820-1.2950 range. The pair fell and managed a strong close below the 200-day EMA at 1.2916. and 50-day EMA at 1.2858.

GBPUSD: Closed at 1.6020 from 1.6131 and traded the range of 1.6007-1.6132.

USDJPY: Closed at 80.47 from 80.11 and traded in 80.11-80.66 range.

Market Outlook:

Spot USDINR has opened at 54.08 from 53.81 and was trading at 54.13. USDINR could trade in 53.800-54.20-54.40 range with bullish bias. USDINR is likely to get support from the strong US dollar gains Friday. Besides this domestic market participants will be looking forward to the developments on US presidential elections. Various polls suggest that President Obama and Republican candidate Romney are locked in a tight battle with the former holding a very slim lead over Romney. A Romney victory could be seen supportive of US dollar, as he has in campaign expressed dissatisfaction about the monetary easing policy followed by the US Fed. US Presidential elections are scheduled for Nov 6.

On domestic front with USDINR is likely to get support from improved demand from precious metals importers as the demand for the same improves ahead of Diwali.

Technical Trades Outlook:

USDINR: Support at 53.25, 52.60 Resistances at 54.20, 54.40, 54.90

Price is struggling to move past above the resistance zone of 54.20-54.40. Only a move above which would push prices higher. On downside, 53.25 remains the support, below which prices would turn weak.

EURINR: Support at 68.90, 67.80 Resistances at 69.90, 70.50, 70.80, 71.20

Price declined below the support of 69.25 levels indicating weakness and could further decline towards 68.90 levels. A move above 69.90 would indicate strength.

GBPINR: Support at 86.10, 85.40, 84.70 Resistances at 87.10, 87.50, 88.30

Price is likely to trade sideways in the range of 86.10-87.10 levels. An either side breakout would determine further direction.

JPYINR: Support at 66.60, 65.80, 65.50 Resistances at 68.50, 69.15

Price almost decline towards the support of 66.60 levels, a further decline below which would lead to weakness. 68.50 would act as strong resistance on upside.

EURUSD: Support at 1.2735, 1.2625 Resistances at 1.3030, 1.3140, 1.3170

Price ended below the support of 1.2825 levels, indicating weakness. Next major support exists at 1.2625 levels. On upside, 1.3030 would act as strong resistance.

USDJPY: Support at 79.50, 79.20, 78.60 Resistances at 80.60, 81.50

Price is trading near the resistance of 80.60 levels. A sustained move above which would push prices higher. 79.50 would continue to act as support on declines.

GBPUSD: Support at 1.5910, 1.5825 Resistances at 1.6140, 1.6180

Price could turn weak towards the support of 1.5910 levels. On upside, 1.6140 remains the resistance.

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