The rupee (INR) began today’s session at 76.1 versus Thursday’s close of 75.78 against the dollar (USD). The local currency has slipped below the important support of 76 and if it sustains below this level, there could be a further decline today.

The immediate support levels for the rupee can be spotted at 76.3 and 76.5. On the other hand, if the local currency manages to strengthen, 76 can be a significant hindrance. Above that level, resistance can be spotted at 75.8.

Foreign Portfolio Investors (FPI), who have been buying domestic assets since the beginning of this month, turned net sellers in the last two trading sessions. While the net outflows on Wednesday were at about ₹920 crore (equity and debt combined), outflows stood at Rs 805 crore yesterday. If this trend continues, the Indian currency could witness further downward pressure.

Dollar index

The dollar index, which has been in a downtrend, posted gaind yesterday after taking support at 96. It closed at 96.84 versus its previous close of 95.96. Currently trading near yesterday’s closing level, the index faces a resistance at 97. A breakout of that level can take the index to 97.75.

Trade strategy

The price action of the USDINR currency pair and the dollar index hint at dollar strengthening. Moreover, the domestic currency has dropped below the crucial support of 76 today. So, traders can sell rupee with a tight stop-loss for intraday.

Supports: 76.3 and 76.5

Resistances: 76 and 75.8

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