The rupee (INR) has opened lower today against the dollar (USD). The local currency has begun the session at 76.74 versus its previous close of 76.53. The Indian currency is now trading at 76.6. The year-to-date loss is about 7.5 per cent.

On Monday, the domestic currency opened flat at 76.45 and ended the day lower at 76.53 after registering an intraday low of 76.69.

The net outflow of the Foreign Portfolio Investments (FPI) stood at about ₹266 crore (equity and debt combined) yesterday. Though the amount of outflow is lower, substantial buying is needed from the FPIs to at least put a momentary break on the rupee decline.

Crude price effect:

The crude oil price witnessed an unprecedented fall where the price in the US ended yesterday’s session at minus $37.63. As India depends on imports for the majority of the crude oil requirement, a fall in price is positive. Though the price has recovered, the overall trend remains negative. Until the price is bearish, it can be a positive factor for the rupee.

Dollar index:

The dollar index closed at 99.9 yesterday and is currently trading marginally above the critical level of 100. If the index can sustain above that level, it might advance to 101; whereas, if the index falls by 100, it could fall to 99.2 – its 50-day moving average.

Trade strategy:

The rupee, after opening below the support of 76.6, registered an intraday low of 76.84. But the local currency then recovered and is currently hovering around 76.6. And, the drop in crude oil price can provide a cushion for the Indian currency. Hence, for intraday, traders can buy rupee with stop-loss at 76.8 if it rallies above 76.6

Supports: 76.87 and 77

Resistances: 76.6 and 76.4

Related Topics
comment COMMENT NOW