Money & Banking

Daily Rupee call: INR could gain today

Akhil Nallamuthu BL Research Bureau | Updated on October 27, 2020 Published on October 27, 2020

The Indian rupee (INR) lost about 25 paise against the US dollar (USD) in the last session, settling at 73.85 after marking an intraday low of 73.88

Traders can be positive on INR until it stays above the support band; initiate fresh long positions for intraday trades with tight stop-loss

The Indian rupee (INR) lost about 25 paise against the US dollar (USD) in the last session, settling at 73.85 after marking an intraday low of 73.88. Following this, the local currency opened the day with a gap-down at 73.95. From the current level, the price band of 74 and 74.1 can be a support band. A breach of 74.1 may result in a sharp fall. But if the local currency recovers on the back of the support band, it can advance to 73.7 — a resistance level. Subsequent resistance can be seen at 73.5.

Though not by a very significant amount, foreign portfolio investors (FPIs) remained sellers on Monday. The net outflow stood at nearly ₹120 crore (equity and debt combined). But since the domestic market has been attracting considerable inflows recently, the likelihood of FPIs turning net buyers is high which can be positive for the domestic unit.

Dollar index

The dollar index has largely been moving in a sideways trend between 92.6 and 93. Unless either of these levels are breached, the next leg of trend cannot be confirmed. But since the major trend is bearish, the index will most likely breach the support of 92.6. Also, it remains below both 21- and 50-day moving averages. A weakening dollar index means a downward bias in the greenback, which can result in the INR gaining some ground against the USD.

Trade strategy

Even though the rupee has opened lower today, it has considerable support in the 74 to 74.1 band. Moreover, the dollar index looks weak hinting at a decline in the dollar. Hence, traders can be positive on INR until it stays above the support band and initiate fresh long positions for intraday trades with tight stop-loss.

Supports: 74 and 74.1

Resistances: 73.7 and 73.5

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Published on October 27, 2020
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