May 15, 2024
Rupee depreciates on strong dollar, rising crude prices; watch this range to take positions in USDINR pair
The Indian rupee opened 10 paise lower at 82.59 per dollar on Thursday against the previous close of 82.49. The local unit is expected to depreciate today amid rising crude oil prices and strong dollar. Further, persistent FII outflow from domestic equity markets may pressurise the rupee. Meanwhile, investors will closely watch initial jobless claims data from the US, which is expected to rise from 183,000 to 190,000. The US$INR is likely to trade towards 82.80 levels, according to ICICIdirect. In the previous session, rupee volatility remained low even after the RBI raised rates by 25 bps and kept its policy focused on withdrawal of accomodative stance.
USDINR(Spot) to trade sideways
RBI Governor Shaktikanta Das on Wednesday noted that core inflation could remain sticky. Retail inflation is projected to be at 6.5% for FY23 from the previous estimate of 6.7%. GDP is projected to be at 7% for FY23 from the previous estimate of 6.8%. No major reaction was seen on Rupee and it traded in a narrow range. “Today, volatility could remain low as no major economic data is expected to be released from the US. We expect the and quote in the range of 82.40 and 82.90,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Surge in crude oil prices, sustained FII outflows to cap upside in Rupee
“We expect Rupee to trade with a slight positive bias amid risk-on sentiments in global markets and softening of greenback. However, surge in crude oil prices and sustained FII outflows may cap sharp upside. Markets participants may remain cautious ahead of statements coming in from various Fed officials for any cues on stance of the US central bank. USDINR spot price is expected to trade in a range of Rs 81.80 to Rs 83.30,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Watch this range for taking fresh positions in USDINR pair
“The USDINR 24 February futures contract showed profit-taking at higher levels. As per the daily technical chart, we observed that the pair is trading above its trend-line support level of 82.15 and RSI is fetching above 60 levels. Looking at the technical set-up, MACD is showing positive divergence but the pair is facing steep resistance around 82.85 levels. If the pair sustains above 82.85 levels it could witness further strength towards 83.05-83.30, else it could test its support level of 82.55-82.30 again. We suggest closely watching the levels of 82.55-82.85 for taking fresh positions in the pair in today’s session, either side breakout of the range could give further directions,” said Rahul Kalantri, VP Commodities, Mehta Equities.
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