Comments
The rupee (INR) closed almost flat at 83.33 against the dollar (USD) on Monday. The dollar index remained flat over the last week, indicating that it has largely been stable versus most of the currencies.
Although there was an intraday decline in the rupee to 84.47 last Friday, it pared the losses and closed within the 83-83.30 range at the end of the session. It has been moving within this price band for about two months.
Supporting the Indian currency, the foreign inflows were encouraging last week. According to NSDL (National Securities Depository Limited) data, the net FPI (Foreign Portfolio Investors) inflows over the past week stood at $1.2 billion. A drop in the crude oil price was also in favour of the local unit. But a minor rally in the dollar in the middle of last week had put a cap on INR’s upside.
Technically, there is no clear trend as the exchange rate of the USDINR pair remains range bound. Below is an analysis of charts.
Chart
The rupee continues to oscillate with the range of 83-83.30. So, technically, the probability of a rally and a fall is equal at this juncture. In case rupee surpasses the resistance at 83, it can extend the upswing to 82.70, the next hurdle. Subsequent resistance is at 82.50.
On the other hand, if the local currency falls below 83.30, we might see a swift drop to 83.50. There is a good chance for the decline to extend to the 83.80-84 support band.
The dollar index (DXY), which attempted to rally last week, faced a barrier at 106. It has now moderated to 105.60 after facing the resistance. It is now hovering just above a support at 105.50. If DXY slips below this level, it could depreciate quickly to 105. A breach of this level can lead to a fall to 104.50. If such a fall occurs in the dollar index, the rupee might gain past the 83-mark.
Outlook
At the moment, there is no indication of USDINR trending in either direction. Therefore, the local currency can remain in the 83-83.30 range for some more time. The direction of the break of this range will lend us a clue about the direction of the next leg of trend.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.