Weekly Rupee View: Rupee may remain sluggish

The rupee (INR) closed almost flat on Tuesday and closed at 82.0325 against the dollar (USD). There hasn’t been much movement in nearly two weeks as the local currency has been range bound.

This was despite strong foreign inflows. According to NSDL (National Securities Depository Limited) data, foreign inflows last week amounted to $1.2 billion. For the month to date, net FPI (foreign portfolio investorsInflows reached $3.5 billion on June 27.

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The dollar rose at the end of last week but strong inflows helped limit the downward trend in the rupee.

Reflecting this, the charts also do not give a hint of the likely direction of the next move. However, below we have discussed the main levels to watch out for.

Schedule

for about two weeks, The rupee fluctuates in the range of 81.85-82.15. If INR can resume the bullish trend and rise past 81.85, it could see a quick rise to 81.60. The rise may extend to 81.40.

On the other hand, if the rupee falls below 82.15, we may see it drop to 82.50, which is support, quickly. Subsequent support is located at 82.75.

The Dollar Index (DXY) rose near the end of last week. However, so far this week, DXY has been slow. It is hovering around 102.50. If it drops from here, the nearest support is at 102. The next support is at 101.

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In case the index rises, the nearest resistance is at 103.20, which capped last week’s high. The potential barrier above this level is at 104.50.

prospects

As it stands, the rupee is likely to continue trading within 81.85 and 82.15. Whether the rupee will go up or down from here depends on the direction of the breakout of this range. Therefore, one needs to be vigilant of these levels.