Daily Rupee call: Go long with stop-loss at 74.35

Akhil Nallamuthu | Updated on March 18, 2020 Published on March 18, 2020

BL Research Bureau

The rupee (INR) has opened higher today, at 73.96 versus Tuesday’s close of 74.24 against the dollar (USD). Yesterday, the local currency was trading flat. It is currently hovering around the critical level of 74, and the year-to-date loss is about 3.6 per cent.

Since the rupee has been in a consolidation phase for the past few trading sessions, it can be safely assumed that the bear trend has halted. In the daily chart, the rupee has been oscillating between 73.5 and 74.5. Unless the Indian currency makes fresh lows, the likelihood of a recovery from here, at least a small one, is highly likely.

Above 73.5, the immediate resistance is at 73.3, above which it can advance to 73. Below 74.5, i.e. the all-time low, it might be dragged to 75.

The net outflow of the Foreign Portfolio Investments (FPI) for the month is at ₹67,306 (equity and debt combined) as per the data by National Securities Depository Limited (NSDL). Despite continued selling, the rupee has been firm in the past few trading sessions – a positive indication.

Dollar index:

Yesterday, the dollar index bounced from the support at 98, where 21- and 50-day moving averages coincide. It went up and registered an intraday high of 99.83 before ending the day at 99.58; the previous close was at 98.07. The index is nearing the critical level of 100, and a break above that level can result in a strong rally, possibly reaching 102 levels quickly. But if it moderates, 99.15 and 98.7 are likely.

Trade strategy:

The price at 74.35 seems to be supporting the rupee. Until the domestic unit trades above these levels, one can be cautiously bullish on the rupee. For intraday, traders can go long in the rupee on dips with stop-loss at 74.35

Supports: 74.35 and 74.5

Resistances: 73.5 and 73.3

Published on March 18, 2020
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