Rupee lingering around 49

Lokeshwarri S.K.BL Research Bureau Updated - November 12, 2017 at 08:28 PM.

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Rupee edged higher on strength in equity market and sustained selling of dollars by exporters. The dollar reversing lower against other currencies also affected the sentiment. Foreign institutional investors have also reduced the intensity of selling in the secondary market thus reducing the downward pressure on the Indian currency.

The Euro halted its slide against the dollar as countries in the Euro zone veered towards 440 billion euro European Financial Stability Facility to back sovereign debt of the beleaguered nations in the zone. Euro dollar cross moved up from the low of 1.31 recorded on October 4 to 1.37 on Monday.

This strength pulled the dollar index down from the recent peak of 79.8. Immediate support is at 77.4 and the next support is at 75.9. Short-term view on this index will however turn negative only on close below 75.9.

Dollar-rupee outlook: Rupee appreciated slightly above the 49 mark to record the intra-day high of 48.8 on Tuesday. Short-term trend in the currency is sideways as it can continue to move between 48.8 and 50 in this period. Short-term view will turn positive only when the currency moves beyond 48.2.

If the currency continues to move in the afore-mentioned range, break down to 50.5 or 51.5 is possible over the medium-term. The medium-term trend in the currency is currently down and a strong close above 47.6 is needed to reverse this trend.

USD-INR futures: edged lower last week but it did not breach our stop-loss at 48.8. Our view remains unchanged since the currency remains in the band between 49 and 50. Investors can continue to buy with the same stop. The contract will face stiff resistance around 50 and short-term traders can exit their position if the contract fails to move beyond this.

Target on a move above 50 are 50.4 and 51.5. Short-term supports are at 48.9, 48.6 and 48.3.

EUR-INR futures: reversed higher to record the high of 67.3 on Tuesday. The contract faces strong resistance in the zone between 66.9 and 67.1. The close above this zone on Tuesday is a positive and traders can initiate fresh long positions if the contract sustains above this level. Subsequent targets are 67.6 and 68. Sharp move beyond 68 will take the contract to 69.1.

The contract will receive support at 66 and 65.2 in the days ahead.

GBP-INR futures: contract too closed above an important hurdle on Tuesday when it closed above 77. Short-term traders can buy the contract as long as it continues to trade above this level. Short-term targets are 78.1 and 79.5.

Short-term supports are at 76.5 and 75.9.

JPY-INR futures: continued to move sideways with a bearish bias over the past week. Supports for the upcoming sessions are at 63.3, 61.9 and 59.7. Traders can hold their long positions with stop at 63.3. Short-term resistance will be at 65.5.

Published on October 11, 2011 14:53