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The rupee (INR) settled with a gain of 14 paise at 73.46 yesterday, against the previous close of 73.6 against the dollar (USD). Today, it has opened on a flat note and is currently trading within the range between 73.4 and 73.5. If INR depreciates below the support of 73.5, it will most likely decline to 73.7. Support below that level is at 74. But if the local currency strengthens and rallies above 73.4, it can potentially advance to 73.15.
Foreign Portfolio Investors (FPI), who have been sellers during the week, pumped money into the domestic market yesterday. Net inflows on Thursday stood at Rs 838 crore (equity and debt combined). However, for the whole week, the net flow was about minus Rs 1,160 crore. If the FPIs resume buying, the rupee could strengthen against the dollar.
Dollar index
The dollar index closed on a flat note yesterday at 93.34, after making an intra-day low of 92.7. It rebounded, taking the support of the 21-day moving average. But the bulls have more work to do as the resistance at 94 is the trend defining level. A solid breakout of that level can turn the outlook positive. But until then, the rallies may not be sustainable. Currently trading at 93.27, support levels can be spotted at 92.85 and 92.5
Trade strategy
Though the rupee is currently trading within the range between 73.4 and 73.5, it could be inclined to advance as long as it trades above the support level of 73.5. But since 73.4 can be a hindrance, traders can go long in INR with a tight stop-loss if it moves above 73.4.
Supports: 73.5 and 73.7
Resistances: 73.4 and 73.15
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