October payrolls came in at 204K much higher than expected. We saw a sharp plunge in major currencies against the USD and US bond prices.
Monday may again see buying pressure on USDINR and paying in forwards on strong US data.
I had earlier shown on the USDINR chart, formation of a falling wedge (reversal pattern) - target for which is 64.00.
With 30 - 40 % of the oil demand being moved to the market and broad USD strenght theme, we will see buying pressure on USDINR plus importers who were waiting for further appreciation on the USD would now rush to the market. Second, it also goes to show that authorities are comfortable with 61.00 - 63.00 levels on the USDINR. And increasingly we are seeing a consensus building in the market that USDINR is not likely to appreciate beyond 61.00 levels. So I still maintain my strategy of buying on dips.
A number of FDI related flows are in the pipeline (Vodafone, Hindustan Zinc, Balco, Coal India, Eithihad - Jet deal) and announcement of the same will see relief rally in rupee. It would do a great deal if the same are approved / announced in a timely manner so as to prevent excessive volatility.
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