The Hindu Business Line : Temporary pull-back in rupee

The rupee has been climbing higher against the greenback since the June 23 trough of 49. Subdued trend in the dollar on waning risk-aversion and strength in equity market were the primary factors that lent support to the Indian currency. Crude’s journey to $73 per barrel has not dampened the sentiment against the Indian currency yet.

The dollar is showing signs of fatigue after the brief spike from June 2. The dollar index traded on Intercontinental Exchange is facing resistance in the zone between 82 and 82.5. This zone could be cleared over the medium term as the currency heads towards the medium term target of 85.

One-month view

We remain circumspect about the outlook for the rupee over the next month. The rally witnessed over the last three sessions can be a temporary pull-back before the currency declines to 49 and 50 over the medium term.

The medium term view will turn neutral only on a close above 47.5. Such a move would imply that the currency would remain in the range between 46.5 and 49 for a few more weeks.

Five-day view

The rupee is currently in a short-term rally that has immediate targets of 47.8 and 47.5. This rally can get arrested below 47.5 and the currency can decline towards 48.4 or 48.9 again.

If the currency appreciates beyond the second target, the upmove can accelerate towards the previous peak of 46.7.

Supports – 48.2, 48.4, 48.9

Resistances – 47.8, 47.5, 46.7

Lokeshwarri S.K.

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