The rupee (INR) opened higher on Wednesday at 75.97 versus its prior close of 76.18 against the dollar (USD). The price band between 75.9 and 76 is a resistance band and if the domestic currency can advance above these levels, it can move higher, possibly to 76.6 and 76.4.

Yesterday, the domestic currency closed slightly higher at 76.18 (previous close was at 76.24), after registering an intra-day low of 76.44. Thus, the rupee has managed to end the session above 76.3 – an important level. However, the resistance at 76 can act as a block for the local unit, capping its gains. So, it should rally past 76 in order to build a sustainable rally.

There was not much activity from Foreign Portfolio Investments (FPI). During Tuesday’s session, net selling by the FPIs amounted to Rs 122 crore (equity and debt combined). Despite that, the equity market closed in the green and the rupee ended marginally higher.

D ollar index

The dollar index has been gradually declining since the beginning of the week. It is currently trading near the lower limit of the range i.e. 99.6; a break below that level can result in a considerable sell-off. A fall in dollar demand can act as a cushion for the local currency.

Trade strategy

Following a marginal gain yesterday, the rupee has opened with a gain today – a positive indication. Hence, traders can be bullish for intra-day and buy rupee with stop-loss at 76.3 if it rallies above 75.9

Supports: 76.3 and 76.6

Resistances: 75.9 and 75.6

Related Topics
comment COMMENT NOW