Weekly Rupee View: Rupee at a crucial juncture

Posted on by

the rupee It was flat on tuesday and It ended at 82.05 per dollar. But over the past week, it has risen 0.4 percent against the dollar.

And supporting the local currency, foreign inflows have been very strong. According to NSDL (National Securities Depository Limited) data, last week net inflows of FPI (Foreign Portfolio Investments) amounted to nearly $1.4 billion. The dollar also saw a sharp decline following the release of US inflation data last week.

As the Indian stock market hits new highs, it can be expected that more capital will continue to flow. Moreover, the dollar is still weak. Therefore, the rupee is likely to remain bullish.

What has been said above, the chart shows that the rupee is now facing a barrier, which may weaken the bullish momentum. Below is an analysis.

Schedule

After gaining support at 82.80 in early July, the rupee witnessed a sharp upward movement. But it is currently trading at 82.05, and it is facing trend line resistance at 82. Moreover, 81.85 is another hurdle. Therefore, with the help of the current momentum, the rupee should break out of these levels, in which case it could rise to 81 in the coming weeks.

However, if the rupee bulls capitulate at the current level, sellers can enter on the back of the 81.85-82 resistance band. As a result, the local dollar may drop to 82.30 or 82.50.

However, the Dollar Index (DXY) fell below the critical support level of 101, thus, the outlook remains bearish. The downside is likely to extend to 99 or even 97 in the short term. For DXY to turn bullish, it must clear the barrier at 101.

prospects

Although the dollar is weak and money flows are positive, the rupee is now facing technical resistance. However, the chance of a breach seems high. In such a situation, we can see the rupee rise sharply to 81 in the near term. However, at this point, the resistance at 81.85 is key.