The Rupee strengthened snapping a two-day fall, as gains in regional share markets fueled hopes for capital flows into local shares. But month-end dollar demand is likely to limit a sharp rise. U.S. Dollar tested both sides of the market with early strength reversing sharply in the US. Better than expected May CB Consumer Confidence at 54.9 vs. 42 forecast was the main catalyst for the reversal. Concerns over demand for US bonds were lessened overnight as a large Treasury Auction was well received. The improvement in consumer confidence led to large gains in stocks and risk appetite improved. Looking ahead, Existing Home Sales are forecast at 4.66M vs. 4.57M previously.
Technical Outlook:
USDINR is expected to give sideways move for the day. With Good support seen at 47.22 levels and key resistance is seen at 47.95.Currency is expected to trade in the trading range of 47.30-47.90 levels for the day. Stochastic is seen trending down but only crossovers can confirm the trend. Market is trading above the moving average level giving sideways outlook.
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