Immediate resistance is around 86.90. A strong break above it can see the rupee strengthening towards the 86.50-86.40 range in the short-term.
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REUTERS
The rupee has recovered very well against the dollar over the last one week. The major trigger for the rise came over the weekend following the GST reforms proposed by the government. That aided the rupee to breach the key hurdle, at 87.30 on Monday, which was capping the upside for about a week. On Tuesday, the domestic currency breached the crucial 87.10-87 resistance zone as well. The rupee has risen about 1.1 per cent in the past week and has closed at 89.95 on Tuesday,
More strength
The break and close above 87 is a big positive for the rupee. The region between 87.10 and 87.15 can now act as a good support zone for the domestic currency.
Immediate resistance is around 86.90. A strong break above it can see the rupee strengthening towards the 86.50-86.40 range in the short-term.
To negate this bullish view, rupee has to remain below 86.90 and fall below 87.15 in the next few days. If that happens, then rupee can weaken again towards 87.50 and lower.
Also, from a big picture, the 86.50-86.40 is a strong resistance which can cap the upside for the rupee for now. A downward reversal from this 86.50-86.40 resistance zone can drag the rupee down towards 87 again over the medium term.
Weak dollar
The dollar index (98.05) is stuck in a narrow range between 97.60 and 98.60 over the last one week. The price action on the chart indicates that the index has struggled to breach 99 and has come down. That leaves the bias negative for the index to break below 97.60. Such a break can drag the index down to 96.60-96.50 in the near term. This can help strengthen the rupee further from current levels.
However, from a long-term perspective, 96.50 is a very strong support for the dollar index. A fall below it is unlikely. So, the chances are high for the dollar index to reverse higher from around 96 and rise back to 99-100.
As such, the strength in the rupee could be short lived and restricted to 86.50-86.40 as mentioned above.
Published on August 19, 2025
