Extending the rally, the rupee gained about 1 per cent on Tuesday ending the session at 72.87 versus the dollar (USD). Notably, it marked a high of 72.75 yesterday, a high in nearly six months.

Following this, the local currency has opened today’s session at 73.06, down by nearly 0.3 per cent compared to yesterday’s close. From here, if the rupee continues to rally, it will most likely retest 72.75, above which it can appreciate to 72.55.

But if there is a correction, the immediate support level can be spotted at 73.15. Subsequent supports are at 73.4 and 73.5.

After substantial selling of ₹3,395 crore (equity and debt combined) on Monday, Foreign Portfolio Investors (FPI) seem to have aligned to the recent trend of pumping in money. Though the amount is modest compared to that on Monday, the net inflow of FPIs yesterday was seen at ₹486 crore. This is positive for the domestic currency.

Dollar index

The dollar index, which declined in the first half of yesterday’s session, recovered in the latter half and ended the day on a flat note. During the day, it registered a low of 91.75 — the lowest price in more than two years. Today, it has been sluggish so far and is trading around 92.35. The nearest resistances are at 92.5 and 93 — its 21-day moving average. Notably, the major trend remains bearish and the likelihood of the index going down is high. The support levels can be 91.75 and 91.4.

Trade strategy

After closing with a considerable gain of 1 per cent yesterday, the rupee has begun the session with a gap-down at 73.06. Nevertheless, it has a support at 73.15 and the intraday trend can be bullish until INR remains above that level. But since 73 can be a hindrance, initiate fresh rupee longs with stop-loss at 73.2 if it moves above 73.

Supports: 73.15 and 73.4

Resistances: 72.75 and 72.55

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