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Last Updated : Jun 23, 2019 10:05 AM IST | Source: Moneycontrol.com

Rise in crude oil prices dampens zest of US Fed rate cut expectations

As per the technical structure, there are no major changes and the USD/INR pair is likely to remain in a rangebound trajectory

Moneycontrol Contributor @moneycontrolcom
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Representative image

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The US dollar once again witnessed supply pressure at falling trend line and Indian rupee traded with positive bias throughout the week.

No major movement have been witnessed in spite of heavy price fluctuations in crude oil prices as other factors supported the Indian Rupee (INR) throughout the week.

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Macro factors are supporting the INR. Bank of England kept the interest rate unchanged and cuts the growth forecast to zero. As many as nine members of Monetary Policy Committee (MPC) voted in the favour to keep the interest rate unchanged but this did not result in strength in INR against GBP as crude oil prices surged over 9 percent during the week.

Apart from this, rate cut expectations in US deteriorates the sentiments of USD and significant fall has witnessed in the USD against all major currencies as fall in interest rates leads to outflow of funds.

Bond yields are trading near 52-week low which is again mounting pressure on USD. On the contrary, news flow of Iran shooting down the US military drone has created negative sentiments for crude oil and as Indian economy being the major importer of crude oil likely to face some pressure but its negative impact is likely to offset with US rate cut expectations.

As per technical structure, there are no major changes and the USD/INR pair is likely to remain in a rangebound trajectory. The declining trend line is acting as resistance for USD and momentum indicators are trading in extremely sluggish zone.

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Figure: USD/INR SPOT

Trend deciding indicators like ADX is trading at the levels of 10 which are suggesting the absence of trend. Though, the flat curve of major moving averages and price structure is suggesting that positive bias is expected in coming week for Indian rupee.

Looking at the current scenario where depreciation for INR is limited, traders can go short in USD/INR 70 and 70.25 call option of weekly expiry.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jun 23, 2019 09:49 am
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