Rally may see accelerated move to test 46.10 levels in the short term
Post the rally seen in November 2010 from 44.20 to 46.11 levels, we have entered into a sideways consolidation where we have been trading in a range of 44.70 to 45.70 levels.
By Hemal Doshi, |
Post the rally seen in November 2010 from 44.20 to 46.11 levels, we have entered into a sideways consolidation where we have been trading in a range of 44.70 to 45.70 levels.
Major resistance is seen at the 200 DMA level of 45.70, prices have tested this resistance thrice in the past four weeks and have declined 40-50 paise from there. Recently, we have tested 45.78 on January 21. We expect a potential breakout on close above the 200 DMA and the rally may see accelerated move to test 46.10 levels in the short term.
Daily MACD is trading in a buy mode above the zero line, which is likely to trigger a bullish momentum for the near term. Any minor pullback may garner support near 45.20 levels.
The FPO of Tata Steel and upcoming FPO by IOC in the coming week is expected to attract dollar inflows. However, as we enter the last week of the month, dollar demand from oil companies will be prevalent throughout the week.
RBI’s monetary policy meeting is on January 25 where markets have already priced in a 25 bps hike in the interest rate, only a surprise on interest rate front will likely impact the market.
Indian equities are expected to trade under pressure as rising commodities price, high inflation and interest rate could hit growth. Global events have much lesser impact on the rupee compared to its past, 50-day correlation with euro has fallen from a high of -0 .96 to the current level of -0 .06.
Correlation with the dollar index has also fallen from a high of 0.93 to the current level of 0.18.We can infer from this that the Indian rupee takes direction more from its own fundamental factors rather than any global event.
(Hemal Doshi is senior manager, Geojit Comtrade)
Major resistance is seen at the 200 DMA level of 45.70, prices have tested this resistance thrice in the past four weeks and have declined 40-50 paise from there. Recently, we have tested 45.78 on January 21. We expect a potential breakout on close above the 200 DMA and the rally may see accelerated move to test 46.10 levels in the short term.
Daily MACD is trading in a buy mode above the zero line, which is likely to trigger a bullish momentum for the near term. Any minor pullback may garner support near 45.20 levels.
The FPO of Tata Steel and upcoming FPO by IOC in the coming week is expected to attract dollar inflows. However, as we enter the last week of the month, dollar demand from oil companies will be prevalent throughout the week.
RBI’s monetary policy meeting is on January 25 where markets have already priced in a 25 bps hike in the interest rate, only a surprise on interest rate front will likely impact the market.
Indian equities are expected to trade under pressure as rising commodities price, high inflation and interest rate could hit growth. Global events have much lesser impact on the rupee compared to its past, 50-day correlation with euro has fallen from a high of -0 .96 to the current level of -0 .06.
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Correlation with the dollar index has also fallen from a high of 0.93 to the current level of 0.18.We can infer from this that the Indian rupee takes direction more from its own fundamental factors rather than any global event.
(Hemal Doshi is senior manager, Geojit Comtrade)
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