• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

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

Declining crude prices and a benign stock market helped the rupee to appreciate towards our first target at 41.7. But the strength in the US dollar arrested the appreciation at that level. The US Dollar Index on FINEX has moved beyond the resistance provided by the 200-day moving average, implying that the dollar strength could sustain in the near term. The next target for the index is at 77.9, which is 2.5 per cent higher.

With the crude prices drawing close to the key support at $110, buoyancy in the dollar and the reversal in Indian equity markets, the downward pressure could return on the rupee in near term.

The reversal from 41.7 has reaffirmed our medium-term range for the rupee between 41.6 and 44. As mentioned before, the area around 41.7 is an important resistance since it occurs at 38.2 per cent retracement of the entire decline from the January peak at 39.02. If the current rally from 43.5 is a pull-back in a bear phase, then the rupee appreciation ought to halt at 41.7 and a sideways move between 41.6 and 44 can ensue for a few weeks before the downtrend resumes.

A weekly close above 40.7 is required to make the medium term outlook positive for the Indian currency.

Weak industrial production numbers pulled the rupee lower to 42.47 on Tuesday. The presence of both the 50 and the 200 day moving averages in the band between 42.4 and 42.8 makes it a strong near-term support. The rupee could move sideways between 41.7 and 42.8 for a few sessions as it struggles to penetrate this floor.

Decline below 42.9 would pave way the way for a re-test of the support at 43 and then 43.3. The short-term resistances would be at 41.7 and then 41.3.

Supports – 42.8, 43, 43.3

Resistances – 41.7, 41.3, 41

Lokeshwarri S. K.

More Stories on : Technical Analysis | Forex

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, 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