The rupee gained 0.2% versus the dollar on Tuesday, finishing the day at 82.66. As a result, the value of the Indian rupee remains stable within a range of 82.40 and 83. Yet, the overall bias is still against the rupee due to a weak local market and risk aversion.
The dollar has been strengthening since the start of last week, although crude oil prices have risen in recent sessions. Also, for the previous three sessions, there were negative FPI flows. The net outflow over the previous three sessions is estimated to be at $513 million based on NSDL data. The domestic unit may fall below the 83-mark if these variables continue to exert sustained negative pressure in the upcoming sessions.
The rupee, which is currently trading close to 82.66, is staying put within the range of 82.40 and 83. Technically, the direction in which this range is breached will indicate our likely next move. Yet as things stand, it is likely that the support at 83 will be breached. In such a scenario, we might observe a decline in the local currency near 83.30. Even 83.50 might be reached during the downturn. On the other side, the rupee may swiftly advance to 82 if it gains momentum past 82.40.
The dollar index, which had a solid week’s end, has since taken a slight dip to 104.7. Yet, the market action is optimistic, and a break of a small barrier at 105.40 could trigger a rise to 107 in the near future. The Indian unit may be affected by this.Despite the flat trend on the charts, there is a bearish bias, and the support level at 83 may be breached. If this happens, the rupee could weaken to 83.30. Overall, the rupee will either remain within the 82.40–83 range this week or decline to 83.30.