Is the rupee rally coming to an end? Well, a technical indicator and analysts tracked by Bloomberg seem to suggest so.
The rupee snapped its four-day gaining streak and closed lower against the U.S. dollar on Wednesday. This after it hit a two-and-a-half-year high of 63.43 against the greenback.
Last week marked the seventh straight week of appreciation for the Indian currency. And more importantly, it managed to snap a six-year losing streak after gaining nearly 6 percent in 2017.
What's Changed?
The dollar has become oversold on the 14-day relative strength index (RSI) chart for the first time since August last year. A level below 30 suggests a pullback may be around the corner. Last time when the gauge slipped below 30 in August, the dollar rallied for four consecutive days and jumped over 1-percent during that time.
Analysts tracked by Bloomberg anticipate the rupee to depreciate going forward. In fact, the Indian Rupee is likely to be the second worst performing Asian currency by end of 2018. The likely depreciation pegged by various analysts stands at 2.25-percent. The Philippine Peso is estimated to be the worst Asian currency in 2018 with an anticipated decline of 2.7-percent.
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