The rise in covid-19 cases and the arising need of a lockdown is creating tension. However, in Europe and the U.S. offset negative sentiments of potential vaccine. The latest reports are stating that the Pfizer vaccine deliveries could start before Christmas and the path of least resistance for both stocks and the Indian rupee remains on the higher side. Nifty and Sensex are at record highs, Bank stocks also witnessed technical pullback despite of Loan Moratorium, as a result of which, the US Dollar is in Pressure.
The spot price of USD INR made an all-time high near 77 after Indian Rupee witnessed tremendous recovery in the price. USD INR November contract has fallen from 75.05 to 73.91against US dollar. Technically, USD INR will sustain below 100-SMA which is placed at 74.75 levels. However, it took a support near 50- SMA at 74.07 levels from where a bounce back can be expected. Resistance is at 74.75-74.95 & Support is at 74.10-73.80 levels. USD INR spot is expected to trade in a range of 73.50-74.75 levels. The one-year forward premium was at 3.12 rupees, which is mildly positive since previous session.
FII pumpeda net $511.56 million in November 2020. FII with the net buy of around 77494 Cr since May is the highest in last 10 years. Current Indian Forex reserves have surged to $555 Billion which will the government in announcing more stimulus packages.
The Dollar Index, which measures dollar value against most currencies, is trading at 92.62, following profit booking in the Dow index. DXY is in small gains against the major currencies after making a low of 92.129. Increasing Coronavirus cases around the world including US is pressurizing the world currency market. Almost all major currencies are trading with negative biasness. The USD INR November contract is trading with positive to sideways momentum at the time of writing.
Rupee may experience more bearish pressure due to the breakout in oil prices, as the OPEC+ is reportedly planning to delay the planned output boost to take effect in January.
The Sterling was weak today morning in Asian trade against the Greenback and market is eyeing on the Brexit talks and EU summit. GBPINR Nov contract is trading at 98.25 and has a short-term support, which is 50 SMA at 96.20 levels. Resistance is at 98.90 -98.55 & Support is at 97.80 – 96.20 levels. GBPINR Nov contract is expected to trade in a range of 97.80 – 98.90 levels.
The European Union is facing strong hurdles due to pandemic problems and most of the counties have imposed strict rules due to the spread of the virus across the continent. EUR INR is trading at 87.84 with slightly negative momentum. Resistance is at 88.30 -88.50 & Support is at 87.43 – 87.29 levels. EUR INR Nov contract is expected to trade in a range of 87.20 – 88.50 levels.
Kshitij Purohit, Product Manager- International Research
CapitalVia Global Research Limited (Investment Advisor)