The rupee recovered after a slow start, reaching an intraweek high of 81.08 on Friday before ending the week at 81.1250 against the dollar. The local currency rose to 80.88 on Monday before reversing drastically lower. It posted a daily loss of 0.32% and closed at 81.72 on Tuesday.Positive foreign flows were mostly responsible for last week’s rise.
According to data from the National Securities Depository Limited (NSDL), net inflows from foreign portfolio investors over the last week totaled close to $462 million. Having said that, the RBI’s potential action may be the cause of the recent sessions’ deterioration. The charts indicate that there is a support for the rupee up ahead that can halt the decline. A chart-based analysis is presented below.
The rupee reached a high of 80.88 on Monday after increasing last week. However, it quickly declined from that point onward. It ended Tuesday at 81.72. However, because the 81.85–82 price range represents a support, the local currency may halt its drop at these levels. Similarly, 81 serves as a barrier on the upswing.
This is a short-term opportunity for consolidation within 81 and 82. Moving forward, the direction of the range 81–82 breach can help us predict the direction of the following trend leg. The dollar index (DXY) has been fluctuating within a narrow range of 101.8-102.5 for almost two weeks. Despite the lack of a trend, the odds are predicted to change in favor of a rebound from here because there is a solid support level at 101.4.