Technical Analysis

Daily Rupee call: Go long above 73.50

Akhil Nallamuthu | Updated on December 18, 2020

BL Research Bureau

The rupee (INR) ended flat last session at 73.58 against the dollar (USD) after briefly trading above the key level of 73.50. Following this, the local currency opened marginally higher 73.54 today and is currently testing the resistance at 73.50 again. A breach of this level can lift the rupee to 73.15 with subsequent resistance at 73. But if it weakens from the current level, the nearest support levels are at 73.70 and 73.85. Below this level, the support can be spotted at 74 – a substantial base.

Foreign inflows continue to remain good as the foreign portfolio investors (FPI) injected a considerable amount of money on Thursday. That is, the FPI net inflow last session stood at ₹2,355 crore (equity and debt combined) thereby taking the net investments for the week to over ₹9,000 crore. This has been supporting the domestic currency, and continued inflow can keep it higher against the dollar.

Dollar index

The dollar index, extending the decline, broke below the support of 90 and ended the last session at 89.82. It registered a low of 89.73 on Thursday, which is the lowest point in about two and a half years. Today it has opened on a flat note and is trading around 89.90. The trend is bearish, and the index is likely to depreciate further. The nearest support levels are at 89.40 and 89.

Trade strategy

The rupee, after opening flat, is currently testing the resistance at 73.50. However, the overall trend is positive. Moreover, the dollar index is likely to fall further. Considering these factors, traders can go long in the rupee with tight stop-loss if it breaks out of the resistance at 73.50

Supports: 73.70 and 73.85

Resistances: 73.50 and 73.15

Published on December 18, 2020

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