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Sep 13, 2013, 01.04 PM IST | Source: Moneycontrol.com

Karvy expects rupee to trade in a range of 62.70-65.50

Karvy Stock Broking has come out with its report on the currency. The research firm expects the USD-INR pair to trade in a range of 62.70-65.50 in the short-term and recommends buying on declines.

Karvy Stock Broking has come out with its report on the currency. The research firm expects the USD-INR pair to trade in a range of 62.70-65.50 in the short-term and recommends buying on declines.

The steep rise in the rupee, which propelled it to move from the 58.71 level to 69.80 against the dollar is now on the verge of approaching a very crucial up-sloping channel support, connecting the highs of 61.53 and 62.11. Now quoting at the 63.65 level, the continuous contract of the USD-INR pair is very near to 61.8% of its retracement level (62.90) of the 58.71-69.80 swing range. Hence, there is a cluster of evidence showing that the pair could find strong support at those levels when and if it approaches the aforementioned levels. Even as we look at the daily chart, there has been a up-sloping trend-line breach and, the authenticity of the same could be seen in two consecutive trading sessions below the 64.15-64.20 level.

The short-term trend has clearly turned lower as the pair has closed below its 21-day exponential moving average level at 64.80 for two consecutive sessions, suggesting an inherent weakness in the pair, which could further push the pair lower to the support at 62.90. The relative strength index, which has fallen from 85 to 46 has clearly been in-gear with the price fall. Considering that the price correction from 69.80 to 63.35 has been a steep one, we expect the prices to witness a higher pullback in the short-term on a test from the aforementioned support level. However, on a breach below the 62.90 level, we could witness weakness in the pair. The support on a breach below 62.90 is at 62.30 followed by 61.30. The resistances are at 64.20 followed by 65.50.

On the whole, we expect the pair to trade in a range of 62.70-65.50 in the short-term and, we recommend buying on declines.

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To read the full report click here

READ MORE ON  USD-INR, Karvy Stock Broking

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