The answer is blowing in the wind
The George brothers’ Avatar small wind turbine is generating electricity for troops in Leh
The Indian rupee (INR) which opened flat on Wednesday remained so throughout the session and ended at 72.91 against the US dollar (USD). Thus, it managed to stay above the important level of 73.00. Today, the domestic unit opened with a considerable gap-up at 72.66, thereby opening above the resistance of 72.70. If the positivity stays, the rupee can appreciate towards its nearest resistance at 72.55. A breakout of this level can lift the local currency to 72.35. Alternatively, if the INR depreciates and slips below 72.70, it can decline to 73.00, a key support. Subsequent support is at 73.15.
The foreign inflow for the week is positive, i.e., the net inflow from foreign portfolio investors (FPIs) stands at ₹1,292 crore. If the inflow continues to remain positive, it can be a supportive factor for the Indian currency, which has been the case for the past one year.
Also read: Rupee surges 20 paise to 72.71 against USD
Dollar index
The dollar index, which has been rallying since the past couple of weeks, has been on a decline since the beginning of the ongoing week. After marking a high of 92.50 on Tuesday, it started to fall and is now testing the critical support of 91.50. Because the recent trend has been positive, bulls might be able to push the dollar index upwards on the back of the support at 91.50. In this case, it is likely to retest the prior high, i.e., 92.50. Resistance above that level is at 93.00. But a break below 91.50 can intensify the sell-off, possibly pulling the index down to 91.00 and 90.65.
Trade strategy
The rupee has opened with a gap-up at 72.66 versus the preceding session’s close of 72.91. However, as it has gained about one-third of a per cent (above average movement) already, the gain might not be extended. Moreover, it has a resistance immediately at 72.55.
Along with this, considering that the dollar index is trading around a support level, the intraday trend might be positive for the dollar and negative for the rupee. So, traders can short INR with stop-loss at 72.45.
Supports: 72.70 and 73.00
Resistances: 72.55 and 72.35
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