The rupee (₹) closed slightly below the support of 75 for past two sessions against the dollar ($). While this can be seen as a sign of weakness in the rupee, it seems to have rebounded from that level today as it has begun the session at 74.93 versus yesterday’s close of 75.04. This provides some relief for the bulls and coupled with the prevailing bearishness in the dollar, the domestic currency can gain from here, at least for intra-day.

Currently trading at 74.9, the nearest resistance can be spotted at 74.8 and a breach of that level can take the rupee to 74.7. But if the rupee reverses and declines below 75, it might depreciate to the next support at 75.15. Subsequent support can be at 75.3.

As the market was bullish yesterday, Foreign Portfolio Investors (FPI) remained buyers. The net inflow on Tuesday stood at just over ₹700 crore (equity and debt combined). If this trend continues, rupee will be able to stay above the support of 75 versus the greenback.

Dollar index

The dollar index declined yesterday after attempting to recover. The price level of 94 is acting as a considerable resistance and until the index remains below that level, the likelihood of a downswing from current level is high. While 93 can be the nearest support, a break below that level can drag it to 92.55, its two-year low.

Trade strategy

The rupee managed to bounce off the support at 75 and the dollar index hints that it could depreciate intra-day. So, traders can remain bullish on rupee and initiate long positions in declines with stop-loss at 75.1.

Supports: 75 and 75.15

Resistances: 74.8 and 74.7

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