The rupee slid nearly one-fifth of a per cent against the dollar on Tuesday as it ended at 83.04. The local currency lost nearly one-third of a per cent over the past week as the dollar made some recovery even as the foreign inflows stayed steady.

According to the NSDL (National Securities Depository Ltd) data, the net FPI (foreign portfolio investors) inflows over the past week stood at nearly $2.4 billion. Month-to-date, the net inflows is a little over $6 billion.

Despite considerable foreign inflows, the rupee remained under pressure as the greenback saw an upswing. The dollar index (DXY) has appreciated nearly one per cent over the past week, triggered by an increase in the US PPI (Producer Price Index).

On Wednesday, the US federal reserves will come out with their latest policy and economic projections. Post the announcement, the dollar might see higher volatility and consequently, the USDINR pair.

Fundamentals aside, below is what the charts say.


The rupee, which topped the resistance at 82.80 last week, made a u-turn and fell through the last week. The rebound in the dollar index (DXY) from the support at 102.80 weighed on the Indian currency.

That said, DXY, currently trading at around 103.80, is facing a resistance between 104 and 104.20. On the other hand, the rupee is now approaching a support at 83.10. Below this, the support is at 83.30.

Considering the trend since the beginning of the year, the rupee reaching a support and the dollar index facing a resistance means, the probability of the domestic currency appreciation is high. If there is an upswing, rupee can go up to 82.80 and then possibly to 82.65.

Nevertheless, the Fed event can have a bigger influence this week. Consequent to this, if rupee slips below 83.10, it can drop to 83.30 or even to 83.50 in the near-term.


Technically, the rupee retains a bullish bias in spite of the recent fall. However, one should be wary of the policy announcement by the Fed, which can be a major driver of the dollar, USDINR pair in the near-term.