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On the charts, the picture is gloomy for the rupee against all majors such as the dollar, euro and pound. After the 2017 rally, the rupee could be heading for a fresh fall in the coming months.
Dollar index
The short-term outlook for the dollar index is mixed. The index can remain range-bound between 87.5 and 91 in the short term. As long as the index remains below 91, a fall to 86.5 cannot be ruled out. But further fall below 86.5 looks less probable at the moment. The level of 92.5 is a key resistance which has to be breached for the outlook to turn bullish. Such a break will then increase the likelihood of the index targeting 95 or even higher levels.
Dollar-rupee
The rupee lacks strength above 64. The fall below 65 last week has increased the possibility of it weakening to 66 in the short term. Subsequently, the currency can test 67 and 67.25 levels over the medium term. The region between 67 and 67.25 is a crucial medium-term support. A bounce-back from here can take the rupee higher to 65 levels. But a strong break below 67.25 will it revisiting the previous lows of 68.86 levels. It will also increase the possibility of a fresh low of 70 and 71 over the long term.
The region between 63.5 and 63 is a strong resistance. The rupee will gain strength only if it breaches 63 decisively. The next target is 62.
Euro-rupee
The rupee has declined below a key support level of 78.5 against the euro in February. Next support is near the current levels at 82. A strong break below it will see the rupee weakening towards 86 and 87 against the euro.
The downside pressure will ease only if the rupee breaks above 78.5. Such a break can take it higher to 77-76 or even 74 thereafter.
Pound-rupee
The British pound looks much stronger against the rupee than the euro. As long as the rupee remains below 89.5, an up-move to 94 is likely in the near term. A strong break above 94 will then pave the way for the next target of 100 over the medium to long term. The pound will come under pressure against the rupee only if it declines below 89.5. In such a scenario, the pound can fall to 87.5 or even 85 against the rupee.
ALSO READ : What's on the plate for the dollar
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