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The Indian rupee (INR) ended the last session with 0.2 per cent loss against the US dollar (USD). Nevertheless, closing at 73.80, the rupee has managed to stay above the support of 73.85; and as long as it remains above the key level of 74, the likelihood of the rupee recovering is high.
Today, the domestic currency has begun the session on a flat note at 73.79. If the bulls can regain traction, the rupee can advance to 73.70 and potentially to 73.50. But if the local currency weakens from the current level, it can find an immediate support at 73.85. Subsequent support is at 74.
Despite the market witnessing higher volatility on Wednesday, foreign portfolio investors (FPI) remained net buyers. Though the amount was not very significant, the net inflow stood at about ₹357 crore. Since the overall trend in the equity market is positive, FPI inflows can continue to remain robust helping the rupee to gain against the greenback.
Dollar index
The dollar index declined in last session and registered an intraday low of 91 before closing at 91.12. Following the breach of 92 before a couple of trading sessions, the trend has turned bearish for the index and it is most likely to fall further from the current levels. Today, the index has opened with a bearish bias and is likely to head southwards. It currently hovers at 91; the nearest support is seen at 90.50 and subsequent support is at 90. The falling dollar index can be positive for the Indian currency.
Trade strategy
The rupee currently hovers at 73.80 and trades above the support of 73.85. Even as it weakened in the last session, the rupee can bounce off the support and appreciate today. Hence, traders can buy the rupee for intraday trades with tight stop-loss.
Supports: 73.85 and 74.00
Resistances: 73.70 and 73.50
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