Forex

Daily rupee call: Rupee expected to remain bullish

Akhil Nallamuthu | Updated on May 13, 2020 Published on May 13, 2020

The rupee (INR) commenced the session with a gain of about 0.3 per cent against the dollar (USD). It opened at 75.27 versus its previous close of 75.5. Notably, 75.3 can act as a resistance, which might cap the gain. Subsequent resistances are placed at 75.15. A decline from current levels can take the exchange rate to 75.6 and 75.8 – the support levels for the rupee.

Despite a weak opening yesterday, the Indian currency took support near 76 and began to advance intra-day. It recovered after registering an intra-day low of 75.88 and ended the session at 75.5, gaining 0.3 per cent against the greenback.

The rupee gained yesterday despite Foreign Portfolio Investors (FPI) being net sellers. The net outflow of the FPI stood at ₹1,662 crore (equity and debt combined). Though, on the other hand, the US dollar index declined marginally yesterday, it continues to trade around the 100-mark.

Fiscal stimulus

While the Consumer Price index (CPI) index based inflation for April was not released because of limited transactions, the Index of Industrial Production (IIP) has contracted by 16.7 per cent for March. The negative effect of this is likely to be overpowered by the announcement of a big bang fiscal stimulus of ₹20 lakh crore by the government.

Trade strategy

The rupee opened with a gain, extending its rally. It can retain a bullish bias while it remains above 75.5. But 75.3 can act as a hindrance. Hence, for intra-day, traders can buy rupee with a tight stop-loss, if it moves above 75.3.

Supports: 75.5 and 75.6

Resistances: 75.3 and 75.15

Published on May 13, 2020

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