The rupee (INR) opened on a flat note today at 73.77 against the dollar (USD). Since the currency has closed below the support of 73.7, the outlook can be biased towards bearish today. If the domestic unit weakens from the current level, the nearest support is at 74. A break below this level can intensify sell-off with subsequent supports at 74.2 and 74.4. But if the rupee strengthens, it can face hurdles at 73.5 and 73.15.

Even though the market was positive on Monday, Foreign Portfolio Investors (FPI) was less active. The net outflow stood at meagre ₹27 crore (equity and debt combined) yesterday. If the FPIs begin to pump in money, it can help rupee strengthen.

Dollar index

The dollar index, which has been in an uptrend since past one week, witnessed a correction in yesterday’s session. Currently trading at around 94.2, it is above the key support of 94, and as long as it remains above that level, it can be inclined to bull trend. If the bulls regains traction, it can rally to 94.7 and 95. On the other hand, if the index weakens and slips below 94, it can decline to 93.7 and 93.4 where 21- and 50-day moving averages coincide.

Trade strategy

The rupee has begun the session flat. However, it lies below the support of 73.7 and the dollar index is trading with a bullish bias. Considering this, traders can take intraday bearish view on the rupee and initiate fresh short positions with stop-loss at 73.6.

Also read Rupee opens on a flat note versus dollar

Supports: 74 and 74.2

Resistances: 73.7 and 73.5

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