The Indian rupee extended losses after falling the most in four months last week as banks bought dollars in anticipation of foreign fund outflows from local shares. U.S. Dollar was stronger as mild risk aversion supported and Crude Oil dipped to new lows. USD/JPY was the exception as the Yen remained the first choice for safe haven flows. US May Trade Balance improved unexpectedly to -26Bn vs. -30Bn previously. This was tempered however as UoM Consumer sentiment in July dropped to 64 from 70 previously, confirming the drop seen in the recent CB survey. Looking ahead, June Fed Budget forecast at -97Bn vs. 33Bn previously.
Technical Outlook:
USDINR charts is expected to remain range bound and trade in the range of 48.71-49.42 levels .Good support is seen at 48.62 and key resistance is seen at 49.55 levels .Stochastic indicators are pointing up and market is also trading near to upper bollingers giving probability of small profit booking.
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