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The rupee (INR) closed flat at 73.55 yesterday versus the previous day’s close of 73.6 against the dollar (USD). Currently at 73.44, the exchange rate is trading within the range of 73.4–73.5. If INR can rally above 73.4, it will most likely appreciate to 73.15. Subsequent resistance is at 73. But if the local currency breaks below the support of 73.5, the immediate support is 73.7. Support below that level is 74.
The market was very volatile yesterday and Foreign Portfolio Investors (FPI) continued to be sellers on Thursday as well. Net outflows were recorded at Rs 959 crore (equity and debt combined), taking the tally for the week to over Rs 2,000 crore. Further selling of domestic assets by FPIs can result in rupee weakening.
Dollar index
The dollar index, which inched up in the first half of yesterday’s session, witnessed a sharp decline from its intra-day high of 93.65 to the day’s close of 93.26. Today, the index looks bearish and is likely to move southwards. Currently trading at 93.15, the nearest support levels are 92.85 and 92.5.
Trade strategy
The rupee has opened higher and the price action looks favourable. Also, the dollar index is hinting at a weak greenback. But 73.4 can be a hurdle for the domestic currency. Considering this, traders can buy INR with a tight stop-loss if it rallies above 73.4.
Supports: 73.5 and 73.7
Resistances: 73.4 and 73.15
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