The Indian rupee opened 10 paise higher at 81.23 per dollar on Monday against the previous close of 81.33 per dollar. The local unit is expected to appreciate further following the weakness in the dollar and a rally in global risky assets. “In the near term, US$INR is expected to trade on a weaker note and move towards the initial supports at 81.20, followed by 80.80. On the upper end 82 would act as key resistance,” said ICICIdirect. Further investors will focus on this week’s key US retail sales and PPI numbers to get fresh direction cues.
Amit Pabari, MD, CR Forex Advisors
“Putting factors influencing the Rupee on a weighing scale and checking which side is tilting more. On the positive side, weaker US data/ yields/ & US Dollar index, then lower Oil prices, easing trade deficit, stronger Asian Currencies- especially Yen and Yuan and FDI flows ( SBI, RBI green bond, Adani FPO, IDBI stake selling will keep on supporting the appreciating move.”
“On the negative side, FII’s persistent outflow this month, RBI’s intervention to build up FX reserves and returning of OMCs to hedge their imports could weigh on the Rupee. Considering the given positives and negatives, one can say that bias-ness for the pair remains bearish with a potential short-term range of 80.80 to 81.80. Whereas, on the upside, resistance is located around 81.50 to 81.80, where exporters who missed to book or have new exposures will look to sell and could be a cap for the pair.”
Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
The USDINR 27 January futures contract extended its fall last week and slipped below 81.50 levels. As per the weekly technical chart, we observed that the pair is trading below its support level of 82.05 and MACD is also showing negative divergence. Looking at the technical set-up, RSI is fetching above 50 levels but the pair is showing weakness on the technical charts. If the pair sustains below 81.55 levels, it could show further weakness towards 81.10-80.95; resistance is placed at 81.85-82.10.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee traded higher as the broad dollar weakness continued against its major crosses. Earlier in the week, gains for the rupee extended as inflation retraced and as industrial production rose on the domestic front. On the other hand, Japanese Yen rose to the highest level in seven months ahead of Bank of Japan policy statement as market participants ramped up bets that the central bank could make further tweaks to its yield control policy.”
“Euro and pound also extended gains against the US dollar as softening US inflation data boosted less hawkish Federal Reserve policy bets. Today, volatility could remain low as US markets remain shut but during the week a few important economic data that will be released from the US and Japan are likely to trigger volatility. We expect the USDINR(Spot) to trade sideways with a negative bias and quote in the range of 81.05 and 81.50.”