Indian rupee made intraday low of 61.52 and closed weaker today by almost 1% at 61.4950.Today’s low is also very close to 5 month low of 61.55.
Dollar buying by foreign banks, broad based dollar strength, weaker Asian currencies and risk aversion in global equity markets due to a standoff between Russia and Ukraine were the factors for weaker rupee today. Chk update: Indian rupee vs US dollar, others
Technically 61.55 is a very crucial level and a break of it will indicate more rupee weakness towards 62.20.
However in short term charts there is negative divergence which indicate that the current weakness in rupee is temporary and any more weakness should be seen as a good opportunity to go long on Indian rupee.
By Hemal Doshi, Geojit Comtrade Ltd.