USDINR Spot Buy @ 66.76 | Stop @ 64.68 | Target @ 69.12 — 71.73 — 75.78
The Indian rupee, currently quoting at 66.76/$, is expected to continue its decline against the US dollar and it can test the level of 71.73 in the medium term.
The Indian rupee depreciated to test an all-time low of 68.80 (Point B) in August 2013 from 51.36 (Point A) level in October 2012.
Thereafter, the rupee appreciated to test the level of 58.34 (Point C) in May 2014. The local currency depreciated later, moving in a channel, and recently touched a low of 67/$.
The rupee is expected to cross the resistance level of 67.06, which is 50% expansion and will further depreciate to test the level of 69.12 and 71.73, which are 61.8% and 76.4% expansion of Point A-Point B from Point C, respectively.
The rupee is likely to get weaker as the Dollar Index will strengthen against the basket of currencies due to signs of improvement in the US economy. The Dollar Index is currently at 98.20 and can move further higher. If it remains above the support level of 97.50 then the Dollar Index may rise towards 101 and 103 levels.
However, if rupee appreciates from the current level and crosses 64.68 then currency may appreciate further to 62.15 level, which seams difficult at current scenario.
