Last week rupee
traded broadly as per our expectation in our weekly report. India’s rupee rose the most in a week
on speculation a slowing inflation measure that excludes food will allow the
central bank to reduce interest rates next week, spurring buying of the
nation’s stocks. “An RBI rate cut next week can lead to the rupee outperforming
in Asia,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. in
Singapore. “The currency is one of our favourites in the longer term”, commented
by Jonathan Cavanaugh. The Indian rupee Friday climbed to its highest level in
two weeks against the U.S. dollar on broad selling in the greenback across the
region. Dollar closed at 54.01 against rupees on Friday, a level not seen since
Feb 27. The government sold 5% stake in state-run National Aluminium Co Ltd to
raise at least 5.1 billion rupees ($93.91 million) on Friday. Banks and exporters
preferred to reduce their dollar position at the current stage in view of
sustained capital inflows coupled with weakness in dollar overseas, Forex
dealers said. Stake sale may take place by next week in steel maker SAIL by 10.82
%. With the inflation data out, the focus will shift to the RBI's policy review
on March 19. A rate cut, the central bank's second easing this year, would help
improve confidence about economic growth, and potentially sparking gains in the
rupee. Net Inflow from FII, as per data from SEBI, comes at $1040.65M this
week; with $200.36M alone on Friday on account of stake sell in NALCO by Govt.
On Daily timeframe in technical charts rupee likely to
continue its upward moves in coming week.RSI at 47 still suggest the pair is
not oversold and more downside on the dollar may witness in coming sessions. After
strong opening on Monday rupee is continuously trading higher against dollar
and close on the higher note. As per charts 53.93 could be the first hurdle to
breach and after that 53.72 could be seen on charts. Ideally rupee can lead the
rally towards 53.57 if dollar do not resist in between. On the other side
strong support around 54.22/54.34 is visible. As per charts rupee is bullish
and any breakout above 53.72 can confirm short term rally in rupee. Parabolic
channel at 54.91 suggest that in short term dollar will find it tough to gain
against rupee. On the flip side buying in dollar by Oil Marketing Company and technical
correction in rupee beyond 54.37 can lead the pair towards 54.57.
Complied By : Amit Daga
Disclaimer : Please read the disclaimer posted in earlier post of the same blogger.This is for sharing of view purpose only and do not suggest or hold any liability occur due to any trading decision.
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