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The rupee (INR) is trading lower after beginning the session at 76.31 versus yesterday’s close of 76.24 against the dollar (USD). In the current session, the domestic currency has slipped below the important level of 76.3 and is currently trading at 76.4.
If the local currency continues to weaken, it can find support at 76.6. Below that level, the price area between 76.85 and 77 can act as a support band. But if the rupee can contain the downside and move up, 76 will be a key resistance above 76.3.
On Monday, the Foreign Portfolio Investors (FPI) were net sellers, dumping assets worth Rs 916 crore (equity and debt combined). If the FPIs go on selling, the rupee can come under further pressure.
Dollar index
The price action of dollar index in the daily chart continues to be sluggish. It has hovered around the 100 level for nearly two weeks. It is oscillating between 99.6 and 100.6 and unless the index moves out of this range, the next wave of trend will be uncertain.
Trade strategy
The rupee, after opening with a gap-down at 76.3, has softened further to 76.4. If it sustains below 76.3, it can be expected to decline more for the day. Hence, traders can sell rupee on rallies with stop-loss at 76.
Supports: 76.6 and 76.85
Resistances: 76.3 and 76
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