Rupee consolidates in range ahead of Interim Budget

After hitting a low at Rs. 69.21 on January 7, 2019, Indian rupee witnessed a steady depreciation against the US dollar and made a high of Rs 71.36. Thereafter, from last two weeks, rupee consolidates in narrow range of Rs 71.36- Rs 70.85. However, after the interim budget volatility is likely to increase, we may see some more depreciation at the rupee’s end. 

Technically, the rupee is trading above its 20-day EMA (70.96), 50-day EMA (71), 100-day EMA (70.90) and 200-day EMA (69.90), which indicates rupee is in medium-long term uptrend. The 14-period day RSI cooled off after touching 60 zone and at present it is trading below its 9-day average. 

In the near term, January's swing high of Rs. 71.53 will be the crucial resistance for rupee. A follow-through move above this level would lead to an extension of the pull-back toward Rs 72, followed by Rs 72.45. While on the downside, Rs 70.85 will be the immediate support, failure to hold this support would lead to further correction up to the level of 69.85 which is the 200-day EMA.