Rupee has intraday resistance at 55: Mangal Keshav

Mangal Keshav has come out with its report on rupee. According to the research firm, rupee is expected to consolidate between 54-55, both remains a good support and resistance level on daily chart. 54 (200-day SMA, 54.6 (100-day SMA) 55 (20-day SMA).

Indian rupee fell slightly, as caution prevailed ahead of the US Federal Reserve's decision on whether to expand monetary stimulus, but a robust growth in factory output and inflows related to share sales supported the local currency. India's annual inflation rate (provisional) based on CPI for the month of Nov'12 increased to 9.9% on a y-o-y basis and as compared to 9.75% (final) for the previous month i.e. Oct'12. In the offshore non-deliverable forwards, the one-month contract was at 54.63, while the three-month was at 55.16. The benchmark 10-year bond yields were flat at 8.18%. Yields rose marginally to 8.19% in intraday trade after October factory output came higher than expected. India's short-end 1-year OIS rate was up 1bp at 7.67% and the benchmark 5-year OIS also up 1bp at 7.09%. India's cash rate ends at 8.05/8.1% versus Tuesday's close of 8/8.1% ahead of reserves reporting on Friday.

The US dollar declined against most major rivals, after the Federal Reserve outlined a new round of monetary stimulus and tied its interest-rate expectations to new thresholds for the country’s unemployment rate and inflation. The dollar index, which measures greenback’s performance against a basket of six major global rivals, fell at 79.858 down from 79.952, with the central bank wrapped up its policy meeting. The Fed has cut its forecasts for economic growth and inflation next year and has committed to monthly purchases of $45bn in Treasuries on top of the $40bn per month in mortgage-backed bonds it started buying in Sept'11.

It will likely keep official rates near zero for as long as unemployment remains above 6.5%, inflation is projected to be no more than 2.5% in 1 or 2 years ahead and inflation expectations remain contained. The euro rose to its highest in nearly 8-months on Wednesday, as the Japanese currency came under pressure on talks of more aggressive monetary easing after a likely victory of the Liberal Democratic Party in an election on Sunday. The Swiss franc is likely to stay weak against the euro next year with the debt crisis in abeyance and as banks discourage franc deposits, making further central banks steps to keep the currency down less likely. 

Technical Alerts:

Rupee-Dollar- Rupee is expected to consolidate between 54-55, both remains a good support & resistance level on daily chart. 54 (200-day SMA, 54.6 (100-day SMA) & 55 (20-day SMA).

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