• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Weak outlook for equities and fear of accelerated outflow of foreign institutional investor funds from the country caused the rupee to decline below the support at 49 on Monday to record the trough at Rs 49.4 against the dollar. But the currency recovered to end the day close to the 49-mark. Rupee forwards on the NDF market continue to display a bearish bias.

Dollar has been moving in a sideways range against major currencies as conflicting reports about the health of the global economy made the currency swing both ways over the week. Dollar index traded on Intercontinental Exchange is locked in a band between 79.5 and 81.5. Break above the upper boundary will take the index to 82.5.

Rupee is in a medium-term down trend since June 2. The targets for the third leg of this decline are 48.9, 49.9 and 51.2. The currency is currently appreciating from the trough at 49.4. This rally could halt in the band between 48 and 48.5 where the long-term 50 and 200 day moving averages are positioned. Reversal from these levels would mean that the medium term decline would continue to drag the currency lower to 50 and beyond. We remain circumspect about the prospects of rupee as long as it trades below 48. Rally above 48 would indicate strength and an impending move above 46 over the medium term.

The currency unit has been struggling with the support zone around 49 over the last few sessions. Short-term resistances are 48.7, 48.2 and 47.5. Short-term view will turn positive on a close above 48.2. Decline below 49.4 will take the currency unit to the key support zone around 50.

Supports – 49.4, 49.9, 50.2

Resistances – 48.7, 48.2, 47.5

Lokeshwarri S.K.

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line