Indian rupee made a low of 61.74 today due to geo-political tensions, weak Asian currencies and weak equity markets as investors moved out of riskier assets on growing fears that conflicts in Ukraine and the Middle East crisis could grow after US President Obama said he had authorized air strikes in Iraq.
However long unwinding, dollar selling by foreign banks and reversal in global dollar strength helped rupee to recoup all of its losses and made a intraday high of 61.13 before closing at 61.14 stronger by 0.13%.
Critical level of 61.55 was breached today, however the close at 61.14 reconfirms that the current weakness in rupee is temporary. There is negative divergence on daily charts which also indicates that the current weakness in rupee is temporary and any weakness should be seen as a good opportunity to go long on Indian rupee for a target of 60.50/60.
By Hemal Doshi, Geojit Comtrade Ltd