Daily Rupee call: Bulls having an upper hand

Although the rupee (INR) opened with a gap-up last session, it was unable to rally much and closed the day near the day's open at 73.36 against the dollar (USD). Nevertheless, on daily close to close basis, it ended 19 paise higher.

Today, the domestic unit opened with a gap-up at 73.26, post which it rallied and is currently trading near 73.10. Thus, INR is now above the resistance at 73.15 and its immediate resistance is at 73.00. A breakout of this level can intensify the rally. But if the local currency weakens from here, 73.15 can offer a support. Below this level, the support is at 73.30. Subsequent support is at 73.50.

The inflows through foreign portfolio investors (FPI), which seemed to slow down a bit last week, looks to be back. On Tuesday, the net investments of the FPIs stood at a significant ₹2,223 crore. The foreign inflows have been a strong source of demand for the rupee and as long as it remains so, INR can stay steady against USD.

Dollar index

The dollar index made an attempt to close above the resistance of 91.00 yesterday. But the bulls fell short of achieving it as the index declined sharply towards the end of the session. Thus, after making a high of 91.39, it retracted and ended at 90.79. The dollar index has been sluggish since today morning and since 91.00 holds strong, it might attract fresh sellers resulting in a fall. This can be positive for the rupee.

Trade strategy

The rupee has opened with a gap-up and is now trading above the resistance of 73.15 and the dollar index is under pressure after facing strong hindrance at 91.00. This is a favourable scenario for the Indian currency to make some gains and it looks like a possible outcome, at least for intraday. So, traders can go long in rupee for intraday with a tight stop-loss.

Supports: 73.15 and 73.30

Resistances: 73.00 and 72.80