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The Indian rupee (INR) opened with a gap-up today at 74.79 versus the US dollar (USD). After opening, the INR inched up and is now trading at 74.73. If it can stay above 74.8, the possibility of a rally is high where the local currency could appreciate to 74.65. Subsequently, it can move to 74.5. On the other hand, if the rupee weakens and slips below the support of 74.8, it might decline to 75. Below that level, the support is at 75.15.
Monday’s foreign portfolio investor (FPI) activity favoured the Indian currency as they net bought for about ₹1,710 crore (equity and debt combined). Notably, FPIs have been net sellers so far this month. Going ahead, if more money comes in, it can help the rupee gain versus the dollar.
Dollar index
The dollar index, following bearish indications, fell on Monday to close below the support level of 96, opening the door for further weakness. On the downside, 95.6 can be the immediate support. A break below this level can drag the index to 95.15. The dollar index being bearish is a good sign for the rupee.
Trade strategy
The rupee, which is above the important level of 75, has moved above the resistance of 74.8 today. This indicates a good positive momentum. Moreover, the dollar index is hinting at a further decline in the US currency. Considering these factors, traders can go long on the rupee intraday with stop-loss at 74.9
Supports: 75 and 75.15
Resistances: 74.65 and 74.5
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