Rupee strengthened extending gains for a third straight day, on expectations of a surge in domestic equities after the ruling coalition won the national elections. U.S. Dollar experienced another day of rapid change in market mood to finish significantly weaker than the start of Asia. The change was led by an incredible post election rally in India of over 17% before being limited by the exchange. The rally sent risk currencies surging and dented the demand for USD and JPY. Looking ahead, April Housing starts forecast at 0.52M vs. 0.51M previously.
Technical Outlook:
USDINR is expected to give bearish consolidation. With Good support seen at 49.20 levels and key resistance is seen at 49.90 .Currency is expected to trade in the trading range of 47.25-47.88 levels for the day. Stochastic is trending up from the overbought levels and the chart pattern shows a doji formation giving reversal signal. Caution required as the market is trading below the moving average level.
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