Buy USDINR spot on dips; support at 54: Karvy

Karvy Stock Broking has come out with its report on currency. According to the research firm, for today USDINR may witness supports of 50% retracement levels. One can buy on dips. It has a supports at 54.00, says Karvy.

This morning huge losses witnessed in euro currency almost 1.34% and presently trading at $1.2905. The euro area agreed to provide bailout fund worth 10 billion euro to Cyprus country. However, the vote for bailout package is due on today. Both Asian equities and currencies are also trading down and this might pressurize rupee. The SGX NIFTY future is trading down by 47.50 points, indicating weak opening of domestic indices which is a weak point for rupee.

The spread between US and Indian bond yield has narrowed from 0.258 to 0.2529 suggesting demand for USD which might pressurize rupee. on the economic front, Europe will release trade balance which is expected to increase and that might limit euro losses. However, positive data expectation from US in the form of NAHB housing market index might support Dollar. Overall we expect rupee to stay weak for the day while during the day slightly pullback could notice on the speculation of RBI rate decision.

USD/INR Spot: On Friday, USDINR opened with down and ended on weak note declining around half a percent. On technical front pair hit 50% retracement level for the range of (52.88-55.18). Momentum indicator RSI-14 declined from 0.51 to 0.48. For today we expect USDINR may open on positive note and may witness supports of 50% retracement levels and we recommend buying at dips. For the day supports are seen at 54.00 then 53.76 and resistance are witnessing at 54.17 then 54.40.

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