Rupee appreciated against the US currency in early trade on dollar selling by banks amid expectations of fresh capital inflow by funds on hopes of firm opening on the domestic stock markets in line with positive trends on other Asian bourses. U.S. Dollar weakened sharply in the US after a volatile day of trading. December US Pending Home sales gained 6.3% vs. -3.7% previously helping stocks to rally. The US FED also extended swap lines with foreign banks and emergency lending programs which had the effect of weakening demand for the USD. Looking ahead for ADP Private Employment Report forecast down -530K vs. -693K. Also released, ISM non-manufacturing forecast to drop -39 vs. 40.1.
Technical Outlook:
USDINR chart pattern gives an indication of bearish consolidation for the day. Currency is expected to trade in the range of 48.50-48.75 levels. with good support seen at 48.45 levels and key resistance at 48.82 levels. Stochastic is seen trending down but caution required as market is trading in a oversold levels giving rooms for reversal.
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