Rupee depreciates against dollar, what to expect near 82 mark?

• The previous day, the rupee registered its biggest single-day fall in percentage terms since December 15 last year, closing at 81.6125 after last week's close of 81.3250.

The rupee weakened against the US dollar for the second consecutive day on Tuesday. The local unit moved closer to the psychological mark of 82. The domestic currency is expected to be under pressure on the back of weaker Asian peers, waning upward momentum, and buying into the greenback. However, this week the rupee is seen closing in the range of 81.20 to 81.80 against the dollar.

The rupee weakened to 81.8375 against the US dollar in early trade on Tuesday. The rupee fell as low as 81.89 against the dollar in early deals.

On the previous day, the rupee registered its biggest single-day fall in percentage terms since December 15 last year to close at 81.6125 from last week's close of 81.3250. On January 13, the rupee saw its best gain in two months.

The Indian rupee depreciated against the US dollar on Monday, tracking a fall in the Chinese yuan and purchase of dollars from public sector banks by the Reserve Bank of India, according to a Reliance Securities note. The rupee closed at 81.6125 per dollar, weakening 0.35% from its previous close of 81.3250, and registering its biggest single-day fall since December 15. The rupee also weakened as stop-losses were also triggered, while foreign portfolio outflows also kept the bias weak. Additionally, the lower premium would prompt importers and foreign exchange liability holders to increase their hedges.

The brokerage expects to remain bearish for the pair USD/INR on Tuesday where immediate support could be seen near 81.30 with resistance near 82.

ICICI Direct note that US$INR may face resistance near 81.80, followed by 82.00 and further decline towards initial support at 81.30 and 81.10. On the upside, the 50-day EMA at 82 will act as a major resistance for the pair.

Further, on Tuesday, Anand James - Chief Market Strategist at Geojit Financial Services said, "Expect a brief consolidation at the beginning of the day, followed by another attempt to push higher towards 82.1. However, the 81.59-81.50 zone is likely to hold a strong position." Inability to contain the inside slippage could again lead to a downside move."

Last week, the rupee appreciated at least 1.7% against the dollar due to a broader weakness in the dollar and a firming trend in domestic equities. The greenback slipped to a near nine-month low against the euro after easing US inflation fueled speculation that the Federal Reserve would be less aggressive with rate hikes in upcoming monetary policies.

Religare Broking in its note for the current week said, this week's bias remains sideways. As a weekly strategy, on a decline around the 81.30 mark (spot) long positions can be initiated by placing a stop below the 81.05 mark to target an upside of 81.80.

This week, economic data will be released from the UK (CPI, retail sales and unemployment reports), China (Q4 GDP and industrial production), Japan (CPI, industrial production, trade data), and the US (PPI and weekly). Unemployment allowance).