USDINR View & Outlook for Week 18-22 Feb13

USDINR:  On weekly chart in candle stick pattern, rupee can go down till 54.76 ideally. RSI is moderate and the pair can look for upper band levels of 54.50/76 and even further 54.88.Rupee likely to get support around 53.85, and on upside it can go further up to 53.67 on the breach of 53.85. The pair is trading above its 100 & 200 Day EMA on weekly basis, and the upper resistance channel is trending at 54.47. An ideal move in market could be first to reach its resistance level and after that corrected towards 54.05/53.93.

• ·         Despite Lower than expected inflation data released last week, RBI likely to maintain base rates in coming meeting schedule next month. Indication from Mr.D.SubhaRao clearly stating that the status on base rate likely to maintain non-change.
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• ·         Gold recovers from its 6 months low and may see pressure from demand side and on technical charts. Lower gold prices may put import pressure on rupee, as demand may pick up for investment purpose. However demand may likely to moderate as market is expecting some more correction in prices in near term.
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• ·         Brent oil prices are still a concern as its trading above the comfortable level of $115,Recent hike in petrol & diesel prices will keep the demand from OMC for oil and with rising oil prices input cost can put pressure on rupee. However on oil likely to correct on weekly chart.
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• ·         Dollar Index is up against its all major currency (basket of six) and trading above to its crucial support levels. A breach of 81.20 could lead for sell off in rupee.
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• ·         Billionaire George Soros dump half of his holding in SPDR gold trust fund, indicating bearish view on Gold as reported by CNN-Money. Mr.Soros also reportedly made almost $1B by betting against YEN since last Nov.
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• ·         G20 Meet in Russia ends last Week skip the criticism of Japan Government policies, virtually supported the Bond purchase of Japanese Govt, and further weaken YEN in early trade this Morning.G20 also discuss the new coined term “Currency War” in their meeting in Moscow. G20 nations agreed not to target their exchange rates in search of a competitive edge but the tensions that led to talk of a “currency war” remain. “We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes,” the G20 finance ministers said in a statement that echoed a similar call last week from the G7.