The rupee (INR) closed Thursday’s session right on the important level of 73 against the dollar (USD). Even as the trend is positively biased for INR and there was a decline in dollar, the local currency was unable to rally beyond 73. Today, it has opened almost flat at 73.03 and is hovering at this level. If the rupee gain enough traction and decisively breaks out of 73, it can appreciate to 72.75, a resistance level. Subsequent resistance is at 72.50. But if INR weakens from here, the nearest support levels can be 73.15 and 73.25.

Despite higher volatility on Thursday, the foreign inflows remained steady. That is, the net investments by the foreign portfolio investors (FPI) stood at ₹1,614 crore (equity and debt combined). This has increased the net inflow for the week to a little over ₹4,800 crore. The inflows has been a good supporting factor for the local currency.

Rupee bullish above 73

Dollar index

The dollar index fell and closed at 90.08 on Thursday versus previous day’s close of 90.43. As a result, it has inched below the 21-day moving average and is currently trading around 90.10. Notably, 90.00 can be a good support. However, a breach of this level can intensify the sell-off and drag it to 89.50 and possibly to 89.25. This can be a conducive scenario for the Indian currency.

Trade strategy

Though the rupee is bullish and the resistance at 73 has been a considerable roadblock for the bulls. So, despite the dollar being weak, INR is struggling to move past 73-mark. But the dollar index indicate that USD can decline from here. Considering these factors, traders can buy INR with tight stop-loss if it breaks out of 73.

Supports: 73.15 and 73.25

Resistances: 73.00 and 72.75

Daily Rupee call: Short INR if it breaches support at 73.25

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