The Indian rupee strengthened more than 0.25% against the U.S. dollar yesterday. Rupee found support against dollar from the level 82.7920. As, the RBI’s monetary policy committee hiked repo rates by 25 basis points to 6.5%. Intraday, it strengthened as much as 20 paise against the greenback to 82.48, It closed at 82.63 on Wednesday
The rate hike decision was as per the most of expectations by market participants. The January CPI inflation is scheduled to be announced on February 14. And, it decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
Technical – Dollar-Rupee expect to consolidate in near future
On the daily chart, since 4 January 2023, Dollar-Rupee Spot pair is struggling to cross massive resistance 82.90. Also, pair is retreating towards 82.40-81.80 levels. Near future pair expect to consolidate in between above range unless Dollar-Rupee pair gives a closing above 82.80.
Immediate support is seen at 82.40, if Dollar-Rupee pair breaks it then will expect to test support 81.80.
Alternatively, if Dollar-Rupee spot pair break above 82.90 then will open the door for next resistance 83.20-83.35.
Looking to the other factor, prospect of higher U.S. interest rates will hold downside momentum in control, as a rate hike would lead again bullish momentum in US Dollar. A slew of Fed officials spoke on monetary policy this week, with all of them raising the prospect of more interest rate hikes. While Fed Chair Jerome Powell noted recent progress against inflation, he warned that a strong jobs market and sticky inflation could invite more rate hikes. Overall sentiment of Rupee will depend not only on the domestic factors, but global central bank statement will also impact in near future trend