Comments
The Indian rupee (INR), which marked an intraday high of 73.70 last session against the US dollar (USD), faced selling pressure as it declined and ended the session at 73.90, i.e. 20 paise lower from the day’s high. Yet, the local currency remains above the key level of 74, and as long as it can stay there, there’s less likelihood of a full-fledged downtrend.
Following this, the INR opened marginally higher at 73.82 on Tuesday. While 73.85 is a support against which the local currency can be expected to bounce back, 73.70 can be a considerable hindrance for rupee bulls. A breakout of 73.7 can take the INR to 73.5 and 73.4. On the other hand, if the rupee weakens, it can find support at 74. This is a key base and a breach of this level can turn the short-term outlook negative for the domestic unit.
The stock market is hitting new highs as foreign portfolio investors (FPIs) continue to pour money into the domestic market. The net investments on Monday stood at ₹3,792 crore (equity and debt combined). If the foreign inflows continue at this rate, it could provide a strong cushion for the Indian currency.
Dollar index
The dollar index, which closed last week on a weak footing, tried to gain steam on Monday. However, after registering an intraday high of 91.24 it depreciated and closed the session at 90.79. Since the overall trend appears bearish, the rallies may not sustain and might get sold into. Today, the index opened at 90.90 and 90.50 can be its nearest support. A breach of this level can intensify the sell-off, possibly dragging it towards 90. A fall in the dollar index means that the greenback is weakening, which is clearly advantageous for the rupee.
Trade strategy
The rupee has opened with a minor gap-up at 73.82 versus the previous day’s close of 73.90. Thus, it has moved back above the support at 73.85. Also, the dollar index is showing bearish bias. Hence, one can be bullish on the INR. But since 73.70 can be a hurdle, traders can buy INR with tight stop-loss if it breaches the resistance at 73.70.
Supports: 73.85 and 74.00
Resistances: 73.70 and 73.50
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.