Re remains weaker on risk aversion in global forex mkt

The continuously rising US Greenback in the international forex market is weighing on the Indian rupee. Further, unabated FII outflows put more pressure on the home currency. On Monday alone, the rupee fell 29 paise to a record low of 83.11, a net fall of 50 paise in three sessions from 82.61 on August 10. The negative bias for the local unit is likely to continue on risk aversion in global markets and the rising US dollar.

“The next significant barrier lies ahead at 83.28-83.30. The 14-period RSI momentum oscillator currently rests at 67-68, signaling the potential for further upside momentum. a subsequent move beyond the next resistance could propel RSI into overbought territory above 70, potentially triggering RBI intervention. With the currency markets shut on August 15-16 due to bank holidays, the market focus shifts to August 17. Should the USD/INR pair open higher on that day, the likelihood of RBI intervention above the 82.20 level heightens,” Tapish Pandey, research analyst at SMC Global Securities Ltd, told Bizz Buzz.

Any decline in crude oil price may support the rupee at lower levels. Traders are taking cues from India’s inflation data, which is soared to over seven per cent from 4.81 per cent in the previous month. The USD/INR spot may trade in the range of 82.50 to 83.50 in the near term.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 per cent to 102.85.

“Technical chart is indicating reflecting current strength in the Greenback as the USD/INR pair broke above 82.95-83.00 range highest in the last five weeks,” adds Pandey.

The USD/INR exchange rate has been on an upward trajectory, finding support at the 200-day Exponential Moving Average (EMA) near the 81.68 level, and subsequently approaching a resistance zone spanning 82.90 to 83.00 levels. Recent sessions have witnessed a consolidation phase at elevated levels, roughly between 82.70 and 82.90, which is indicative of a potential support-resistance role in the upcoming sessions. Any breach of this consolidation range is likely to dictate the pair’s next directional move.

Reviewing the trading dynamics, the USD/INR pair initially entered an overbought zone at the beginning of the week. However, over the course of the week, the pair underwent a consolidation phase, resulting in a cooling off of the trading sentiment from overbought to neutral territory.

Pandey forecasts: “Considering critical factors such as the prevailing trend, the pair’s strength, prominent resistance levels, and the prevailing trading sentiment, our outlook suggests a forthcoming consolidation phase within the 82.50 to 83.00 range for the USD/INR pair.

Moreover, a potential dip below 82.70 presents an opportunity for buying, with a suggested stop loss below 82.50. This strategic move aims to capitalize on a potential rally towards the significant resistance level at 83.00.”