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The rupee (INR), which lost quarter per cent versus the dollar (USD) on Monday, began the session on Tuesday on a weak foot. It opened at 75.15 against Monday’s close of 75.01. The local currency has slipped below the critical support of 75, and if it remains below that level, it can depreciate to 75.3 and subsequently to 75.5. But if the local currency recovers and moves back above 75, it can rise to 74.9 and 74.8.
The net inflows from Foreign Portfolio Investors (FPI) amounted to a staggering ₹7,818 crore (equity and debt combined) yesterday. However, it was because of a block deal in one particular stock. Removing that, the net flow would be negative and if this trend continues, the rupee will face more downward pressure.
Dollar index
The dollar index, which attempted to rally, faced a considerable hindrance at 94 from where it has declined to end the session on a flat note. Until it stays below 94, the bears are likely to have an upper hand. Today, the index has been trading flat since the open and is hovering around 93.5. If the bear trend resumes, it is likely to fall to 93 and then it might retest 92.55 – its two-year low.
Trade strategy
The rupeehas opened with a gap-down today and is trading around 75.15. As it remains below 75, it can face downward pressure today. So, traders can sell rupee with stop-loss at 74.9.
Supports: 75.3 and 75.5
Resistances: 74.9 and 74.8
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