The harmonic pattern showed a bearish trend as revealed through the Dollar index monthly chart.
Vinay Khattar, research head, of Edelweiss Broking’s research said, “Bearish observations on the dollar index support our bullish view on emerging equity for the next few months.”
The Sensex has recovered beyond 2,800 points within just four days to climb up to 58,000.
The current Rupee appreciation has resulted due to the healthy monsoon, better than expected earnings season, and a steady buying trend by foreign institutional investors. Analysts trust that in case the dollar index continues the decline against most of the currencies, its bounce back in Indian equities may get quite long.
The dollar weakened due to a decline in US treasury yields and disappointing results, leading to the steady rise in the Indian rupee touching a one-month high of 78.87rupturing the all-time low level of 80 the earlier month.
Analysts believe that the capital outflows from various other markets to America have slowed down due to the steady decline in the dollar index from 109 to as low as 106 respectively.
