The Hindu Business Line
Rupee likely to regain strength
The rupee has been in a shortterm uptrend since taking support at 71.8 in early February. But after hitting a resistance at 68.53 in mid-March, the currency began to weaken.
The rupee is in a near-term corrective decline. The significant support in the band between 69.3 and 69.5 can provide a base for the currency. Taking support from this band, the rupee has the potential to strengthen to 68.5 and 68.3 in the ensuing trading sessions.
Following a weak start, the rupee regained its bullish momentum and began to appreciate in the second half of Tuesday’s session. Appreciating marginally, the currency closed at 68.74 on Tuesday. After encountering a key resistance at 97.5 in early March, the dollar index started to decline. But the index found support at 95.17 in mid-March, and has been on a recovery mode. Last week, the index had advanced 0.7 per cent. It now faces an immediate resistance at 97.
A strong break above this level can take the index higher to 97.5 in the coming week.
A downward reversal from these key resistances can keep the index in a sideways consolidation phase in the wide range between 95 and 97.5.
The rupee witnessed a minor corrective decline in the previous week and found support at 69.4. Subsequently, the currency began to strengthen and breached a key resistance at The short-term uptrend of the rupee will remain intact as long as the currency trades above 69.4
69. The short-term uptrend will be intact as long as it trades above 69.4. The currency can regain strength and trend higher to 68.5 in the near term.
A strong break above 68.5 can take it northwards to 68 against the dollar in the short term. An emphatic break above 68 will underpin the
short-term uptrend and take it higher to 67.55, which is a vital resistance for the currency from a medium-term view.
Having said that, the nearterm positive outlook will get negated only if the rupee falls below 69.4 conclusively.
In such a scenario, the rupee can extend its decline to 70 in the short term.