The Indian opened higher at 82.81 per dollar on Wednesday against the previous close of 82.89. The local unit is expected to depreciate, mainly on the back of a strong dollar and pessimistic global market sentiments. Further, investors are wary ahead of major economic data from the US and FOMC meeting minutes. Meanwhile, softening of crude oil prices may prevent a sharp fall in the domestic currency. “US$INR (January) is facing strong resistance near 83.20 levels. As long as it sustains below this level it may slip back to 82.80 levels,” said ICICIdirect.
Rupee remains in narrow range
“The rupee has remained constantly near the upper band of the broad range of 81.50-83.00 levels since mid-December despite the stronger domestic economy. Apparently, amid heavy dollar buying by the PSUs, oil companies, and major corporates. On the other end, relatively fewer orders with exporters due to the global slowdown coupled with lower forward premiums are discouraging the exporters to sell,” said Amit Pabari, MD, CR Forex Advisors
However, as witnessed earlier, RBI seems to have held its reins tight around 83.00 levels and would take an opportunity to use its reserves if there is any erratic move seen in the USDINR pair. Overall, the longer the pair remains in a narrow range, the sharper would be the breakout and the chances of a breakout below 82.50 are higher than above 83.00-83.20 levels, given by otherwise stable peer currencies and domestic fundamentals,” he added.
USDINR to trade with positive bias
Dollar jumped before the Federal Reserve releases minutes today from its December meeting, while the euro was dented by moderating inflation data. Expectation is that the central bank would signal more policy tightening in its coming meetind ahead. On the other hand, The euro fell after German regional inflation data showed consumer price pressures eased sharply in December. “Today, the focus will be on the ISM manufacturing PMI number from the US and later in the week non-farm payrolls data will be released and better-than-expected data could keep the dollar supported at lower levels. We expect the USDINR(Spot) to trade positive and quote in the range of 82.50 and 83.20,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
USDINR may test 83.70 in near-term
“The USDINR 27 January futures witnessed volatility and crossed 82.85 levels again. On the daily technical chart the pair is trading above its resistance level of 82.85. RSI is fetching above 60 levels but MACD is showing negative divergence on the daily technical chart. The pair is seeing a consolidation in the range of 82.55-83.20 from the past two weeks. If the pair continues to sustain above 82.85 level it could test its resistance level of 83.20-83.35 again; support is placed at 82.55,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
“The Indian rupee continued its downward drift as importers rush for dollar buying while the inflows remained muted as traders awaited Wednesday’s FOMC meeting minutes. Spot USDINR has been consolidating in the narrow range of 82.40 to 82.95. Looking at the greenback price action against the major currencies, the chance of an upward breakout is higher in the pair. Once the breakout confirms above 83, the short-covering rally will be imminent and levels of 83.50 and 83.70 can be seen in a short span of time,” said Dilip Parmar, Research Analyst, HDFC Securities.