Indian rupee set for a directional breakout against US dollar: Analysts

Indian rupee could see big breakout after being locked in tight range - analysts

Edited By Surajit Dasgupta
Updated4 Jan 2023, 04:49 PM IST
The longer the rupee-dollar pair remains in a narrow range, the sharper would be the breakout: Analysts
The longer the rupee-dollar pair remains in a narrow range, the sharper would be the breakout: Analysts

The Indian rupee's may see big directional move after trading in a narrow range against the dollar over the last three weeks, analysts said. The rupee has been in a range of 82.40 to 82.94 range since mid-December, possibly due to intervention by the Reserve Bank of India and persistent demand for dollars.

"The longer the narrow range prevails ... the higher is the risk of a big eventual break," said Anindya Banerjee, head research - fx and interest rates at Kotak Securities, told Reuters. In September-October last year, the rupee fell from 80.00 to 83.29 in just a month after being held in the 79.50-80.00 range.

The rupee today traded at 82.80, pulling back from close yesterday's close of nearly 83. 

“The USDINR pair after multiple attempts failed to move above the 83.00 handle, and was broadly consolidating between 82.50 and 83.00. The way the pair reacts around the 83.00 zone will be crucial to watch. As of now technically we can expect the 83.00 level to act as a resistance and on the down side we might see 82.50 act as a support,” Anindya Banerjee said. 

The realized volatility on USD/INR has fallen to below 2%, the lowest since June 2022.

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, said CR Forex Advisors in a note.

“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. 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,” CR Forex Advisors said.  

Anand James - Chief Market Strategist at Geojit Financial Services, said that a pullback below 82.84 could again render the trend sideways within the consolidation band of 82.75-82.59. (With Agency Inputs)

 

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:4 Jan 2023, 04:49 PM IST
Business NewsMarketsStock MarketsIndian rupee set for a directional breakout against US dollar: Analysts

Most Active Stocks

NTPC share price

392.45
03:59 PM | 11 NOV 2024
-5.25 (-1.32%)

Tata Motors share price

804.75
03:59 PM | 11 NOV 2024
-0.95 (-0.12%)

ICICI Bank share price

1,269.15
03:58 PM | 11 NOV 2024
9.8 (0.78%)

Tata Steel share price

144.95
03:42 PM | 11 NOV 2024
-2.6 (-1.76%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Wipro share price

572.25
03:59 PM | 11 NOV 2024
3.4 (0.6%)

Federal Bank share price

207.75
03:51 PM | 11 NOV 2024
1 (0.48%)

Indian Hotels Company share price

729.45
03:59 PM | 11 NOV 2024
-3.6 (-0.49%)

Page Industries share price

47,349.95
03:29 PM | 11 NOV 2024
-637.85 (-1.33%)
More from 52 Week High

Asian Paints share price

2,542.65
03:44 PM | 11 NOV 2024
-226.6 (-8.18%)

CE Info Systems share price

1,890.15
03:53 PM | 11 NOV 2024
-165.65 (-8.06%)

UPL share price

515.10
03:47 PM | 11 NOV 2024
-42.5 (-7.62%)

Aarti Industries share price

439.55
03:58 PM | 11 NOV 2024
-35.2 (-7.41%)
More from Top Losers

Biocon share price

348.85
03:58 PM | 11 NOV 2024
27.6 (8.59%)

Borosil Renewables share price

503.10
03:40 PM | 11 NOV 2024
37.5 (8.05%)

ITI share price

327.40
03:59 PM | 11 NOV 2024
23.8 (7.84%)

Power Finance Corp share price

481.60
03:58 PM | 11 NOV 2024
32.15 (7.15%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    78,775.00-600.00
    Chennai
    78,781.00-600.00
    Delhi
    78,933.00-600.00
    Kolkata
    78,785.00-600.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.92/L0.00
    Chennai
    100.80/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts