Technical Analysis

Daily rupee call: Go long with stop-loss at 73.5

Akhil Nallamuthu | Updated on October 08, 2020

Gaining 13 paise against the dollar (USD), the rupee (INR) ended the session on Wednesday at 73.33. Today, it has opened on a flat note and faces a resistance at 73.3. If the local currency gains above this level, it can possibly appreciate to 73.15. Above that level lies the important resistance of 73. But if the rupee declines on the back of resistance at 73.3, it is likely to depreciate to 73.5. A breach of this support can take the exchange rate of USDINR to 73.7

Continuing with the positive trend, Foreign Portfolio Investors (FPI) bought a significant amount of domestic assets. The net inflow stood at Rs 1,093 crore (equity and debt combined) on Wednesday. With that, the net investments of FPI for the week has gone up to about Rs 2,430 crore. These inflows are positive for the rupee and if this trend continues, the rupee is likely to post more gains against the dollar.

Dollar index

The dollar index fell yesterday and is currently trading at around the 21-day moving average at 93.6. Thus, it remains below the crucial level of 94 and while it stays so, the index will be inclined to decline. Support levels can be spotted at 93.25 and 93. A weakening dollar index means tepid demand for the dollar and so, it can be positive for the rupee.

Trade strategy

The rupee has been trading with a positive bias and the dollar index hints at further depreciation in the greenback. Considering these factors, the domestic currency is likely to cross over the resistance of 73.3. Hence, traders can be bullish on INR and buy for intra-day with stop-loss at 73.5.

Supports: 73.5 and 73.7

Resistances: 73.15 and 73

Published on October 08, 2020

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