The rupee (INR) settled lower at 73.38 on Thursday versus preceding day’s close of 73.29 against the dollar (USD). Thus, the local currency has slipped back below the support of 73.3, opening the door for further weakening. The immediate support from the current level is at 73.5 with subsequent support at 73.7. On the other hand, if the domestic currency appreciates above 73.3, it is likely to face hurdle at 73.15. Above that level, 73 can be a strong resistance.

As the market was considerably bearish, the Foreign Portfolio Investors (FPI) sold domestic assets. The net outflow on Thursday stood at ₹604 crore (equity and debt combined). Nevertheless, the net investments for the week remains positive that is about ₹1,670 crore.

Dollar index

The dollar index gained yesterday by about half a per cent as it closed at 93.8 as against the previous day’s close of 93.38. However, 94 is a key barrier and until it trades below this level, the rally may not be sustainable. But a breakout of 94 can turn the near-term outlook positive and the index is likely to appreciate to 94.25. Resistance above that level lies at 94.6. Support from the current level can be seen at 93.6 and 93.4

Trade strategy

Though the rupee has opened with a gap-down at 73.43, it has a strong support at 73.5. As long as the local currency lies above this level, the likelihood of a recovery is high. Hence, for intraday, traders can buy INR with stop-loss at 73.5.

Supports: 73.5 and 73.7

Resistances: 73.3 and 73.15

comment COMMENT NOW