Rupee moving towards worst quarterly loss in the last two years

INR gained for the fifth successive day following the weaker dollar index, optimistic investors sentiment and lower crude oil prices. However, it is indeed heading towards worst quarterly loss in two years. Read on to find out more. 

Indian rupee in line with other Asian currencies opened higher and further gained as the day progressed. Post immense selling this quarter, foreign institutions became net buyers in last couple of days. In spot markets, USD/INR pair opened around the 75.63 level.

Rupee gained for the fifth successive day following the weaker dollar index, optimistic investors sentiment and lower crude oil prices. The Central Bank announced a five billion dollar sell and buy swap further added fuel to rally of INR. The spot USD/INR pair fell 17 paise or 0.22% to 75.63 on Wednesday.

With USD/INR pair closing at 75.63, the technical setup has turned bearish. In the near term, its support is placed at 75.4, while its resistance is placed at 75.8.

As Treasury yields eased, the US dollar declined the most against its group of 10 peers. The US Treasury 10-year benchmark bond yields dropped around five basis points to close at 2.35%. On unanticipatedly high Spanish and German inflation, the Euro advanced.

The April futures of the USD/INR pair declined for the fifth consecutive day. But after four bearish candlesticks pattern formed a bullish candlestick pattern signifying short-covering in action ahead of financial year-end.

The pair is trading below its short-term as well as its medium-term moving averages suggesting near term weakness. Talking about indicators, the Relative Strength Index (RSI) plummeted below 50 and is further heading downwards indicating weaker momentum.

The USD/INR pair is expected to trade between 76.3 to 75.8 levels with a negative bias. However, if it falls below 75.4, then it might further move towards 74.99 levels which is also its 61.8 per cent Fibonacci retracement level.