USDINR has intraday support at 53.75: Karvy

Karvy Stock Broking has come out with its report on currency. According to the research firm, the support for USDINR for the day would be 53.75 and the resistance can be seen at 54.14 levels. Market should trade in the defined range for the day.
 
On Thursday, the Indian inflation rate has declined from 7.18% to 6.62% on the back of various reforms done by Government. Despite of this rupee depreciated by 0.21% to close at 53.93 tracking bearish tone of domestic indices and euro currency.  The Asian equities were ended on a higher note on the back of Bank of Japan eased monetary stimulus of 76 trillion Yen to fight against deflation. While domestic stock markets moved down, Sensex fell by 0.57% to close at 19497.18 and Nifty weighed down by 0.61% to 5896.95. 

The major economy of euro area, Germany and France, GDP growth rate has shrunk more than expectation. Simultaneously, euro area GDP rate have fallen from - 0.10% to -0.60%. This had supported downside in shared currency euro, which was moved down by 0.66% to close at $1.336. along with European equities ended on a weaker note down by 0.15% . The US weakly jobless claim data has increased from its prior figure. This had put negative impact on US stock markets and it went down by 0.03%. Dollar index rose by 0.46% to close at 80.458. 

Outlook:
 
This morning euro is trading weak at $1.3362. The Asian equities are also in bearish tone. Therefore, we may see weak opening of USD/INR. However, we believe euro might revive ahead of better trade balance data today so the positive impact could be noticed on rupee too. In the meantime, the expected data from US in the form of industrial production, TIC flows etc are all likely to have negative impact on USD so that should be a supportive factor for rupee to gain. As per the news the US has planned to delay in $1.2 trillion of automatic spending cuts for defense and domestic programs and set it to start from 1st of March. Looking at the above scenario we expect rupee to trade mix for the day. Therefore, we recommend a trading range for the day. Nonetheless, some weakness should be noticed during the day.

USDINR Spot:

February futures USDINR traded sideways last day. In the early session it made an intraday low of 53.8575 while it ended on a higher note at 54.0150 levels. As discussed in the last day’s report rupee is entangled with few moving averages. The same scenario still holds. The support for the day would be 53.75 (stated in our previous report) and the resistance can be seen at 54.14 levels. Market should trade in the defined range for the day. Today is the last day of this week so it should be a little tricky. However, yesterdays’ low can be considered as a strong support for rupee supported by the moving averages.

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