The rupee (INR) has opened the week higher versus the dollar (USD); it has begun today’s session at 76.17 against last week’s close of 76.45. Thus, it has gone past the key resistance at 76.3.

Last week, the rupee closed on a flat note, at 76.45 versus 76.4 – its previous weekly close. Notably, the local currency registered a new lifetime low of 76.91 intra-week but then recovered towards the end of the week.

Though the market witnessed Foreign Portfolio Investments (FPI) buying last week, the net flow for the current month remains negative. In April, so far, the FPIs have net sold ₹9,819 crore (equity and debt combined) according to the latest data by the National Securities Depository Limited (NSDL). Going ahead, a continuation of the positive trend in FPIs can substantially support the Indian currency.

Foreign reserves

The weekly statistical supplement released by the Reserve Bank of India (RBI) last Friday showed that the foreign reserves went up between April 10 and 17. As per the report, the total reserves increased by $3.1 billion i.e. the total reserves increased to $479.5 billion from $476.4 billion. Foreign Currency Assets (FCA), the largest component of the reserves has gone up by around $1.5 billion to $441.8 billion from $440.3 billion. Also, the value of gold holdings increased considerably to $32.7 billion compared to previous week’s $31.1 billion.

Dollar index:

The dollar index went up last week and closed at 100.38 i.e. above the important level of 100. However, for the index to establish a sustainable rally, it should breach the resistance at 101. A break above 101 can even lift the index to 103. On the downside, 99 can act as a good support.

Trade strategy:

The rupee, which opened above the key level of 76.3, is hovering around the resistance band between 75.9 and 76. Hence, traders can go long in rupee with stop-loss at 76.3 if it rallies past 75.9

Supports: 76.3 and 76.6

Resistances : 75.9 and 75.6

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