Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee ended flat on Friday but appreciated for a 2nd straight week against the dollar, supported by inflows for IPO and the dovish Fed chairman for U.S. monetary policy.
The Rupee ended at 74.56 compared with 74.54 in the previous session. The local currency strengthened 0.1% this week after rising by 0.1% in the previous week.
However, the Rupee could not sustain gains due to consistent dollar buying from state-run banks, likely on behalf of importers.
Possibility of the Reserve Bank of India buying dollars through also prevented the currency from appreciating sharply.
Technically, the USDINR Spot pair holds a resistance zone near 74.60-74.88 levels where it holds a strong support near 74.30-74.25 levels. It could see marginal upside momentum in coming week where breakout above 74.85 is waited for further upside movement.
The USDINR Spot pair could trade in a range of 74.30-75.20 levels in coming week.
The Dollar was headed for a weekly gain on Friday, supported by investors' move towards safe haven appeal of the greenback as rising COVID-19 infections loomed over the pandemic recovery.
Solid U.S. data and a shift in interest rate expectations after the Federal Reserve flagged in June sooner-than-expected hikes in 2023 have put a floor under the greenback over the past month and made investors nervous about shorting it.
The gains came despite Fed Chair Powell reiterating on Thursday that rising inflation was likely to be transitory and that the U.S. central bank would continue to support the economy.
Traders will be watching out for U.S. retail sale figures for June due later this session and looking for any reading on inflation and the strength of the recovery.
Technically, the Dollar Index is sustaining above 21-Daily Moving Average which is placed at $92.20 levels where above $92.30could further see $92.85-$93.40 levels. Support is at $92.10-$91.50 levels.