Technical Analysis

Daily Rupee call: Go long on INR with tight stop-loss

Akhil Nallamuthu | Updated on July 03, 2020 Published on July 03, 2020

BL Research Bureau

The rupee (INR) has begun today’s session with a gain of a little over half a per cent against the dollar (USD). The local currency has opened at 74.58 versus yesterday’s close of 75.01; also, it broke out of the range of 75.4 and 75.8.

Further strengthening of the rupee can take the exchange rate to 74.5, which can be resistance. Subsequent resistance is at 74.35. On the other hand, if the domestic currency weakens, 75 can be substantial support. Below that level, it might weaken to 75.15.

Foreign Portfolio Investors (FPI) continue to offload local assets this week. Yesterday, the net outflow was registered at ₹556 crore (equity and debt combined), and thus the figure has gone up to nearly ₹6,200 crore for the week. Despite this, INR can put on a strong fight against USD.

Dollar index:

The dollar index, after briefly trading below the support of 97, has recovered and is currently hovering around 97.25. Hence, the index might have come back into the range between 97.15 and 97.75. However, 97.75 is considerable resistance, and until it remains below that level, the index will be bearish biased.

Trade strategy:

The rupee has rallied past 75, opening the door for further strengthening. Also, the dollar index continues to stay below a critical resistance. But currently trading at 74.7, INR might witness a minor intraday correction.

Considering that, traders can either go long in rupee with tight stop-loss if it rallies past the current intraday high of 74.57 or go long in rupee with stop-loss at 75.1 if it moderates to 74.9.

Supports: 74.9 and 75

Resistances: 74.5 and 74.35

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Published on July 03, 2020
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