It was a volatile week for the Indian Rupee (INR) in the derivatives segment. Broadly, the trend was mixed as the rupee strengthened against the Euro (EUR) and British Pound (GBP) and weakened against the US Dollar (USD) and Japanese Yen (JPY). The Euro (EURUSD) and Pound (GBPUSD) tumbling against the US dollar aided the rupee to strengthen against them. The GBPUSD tumbled 1.5 per cent last week while the EURUSD, which was down sharply by 1.88 per cent intraweek, managed to recoup some of the loss to close the week down by 0.53 per cent.

The EURINR (84.60) and GBPINR (101.15) Futures contracts (March) on the National Stock Exchange (NSE) were down 0.72 and 0.86 per cent respectively. The EURINR has support at 84, which is likely to hold and trigger a bounce-back move towards 85 and 86 in the coming weeks. Similarly, support for GBPINR is in the 100.75-100.50 region from where fresh rise to 102-102.50 can be seen. To sum up, there is limited room for the rupee to strengthen further against the euro and pound. As such, traders can consider buying these two pairs on dips.

Against the US dollar, the USDINR (75.60) Futures contract (March) is broadly ranged between 74.50 and 76. The bias is bearish to break 76 and see a rise to 76.50-77. Fresh longs can be considered on an upside breakout above 76. The outlook for JPYINR (65.52) is slightly mixed. Currently, the cross is oscillating in the range of 65-66.50. This sideways range is likely to remain intact for some more time. A breakout on either side of this range will then determine whether JPYINR can go up to 67-67.50 or fall to 64. Until then, traders can play the range by buying lower and selling higher.

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