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The rupee (INR) opened higher on Wednesday at 75.51 versus yesterday’s close of 75.61 against the dollar (USD). It continues to trade within the range of 75 and 75.6 and until it breaches either of these levels, the next leg of trend cannot be confirmed.
If the local currency appreciates on the back of support at 75.6, it will face hurdles at 75.3 and 75.15. On the contrary, if the rupee breaks below 75.6, it might attract considerable selling interest, in which case the exchange rate might move to 75.8 and 76.
Foreign Portfolio Investors (FPI) were net buyers yesterday, continuing with the recent buying trend. The net inflows stood at Rs 490 crore (equity and debt combined).
Dollar index
The dollar index, which closed in the red yesterday, has been declining since morning today. Consequently, it has slipped below support of 96.4. The index is likely to fall towards the nearest support at 96.
Trade strategy
The Indian currency continues to hover around the support level 75.6. As long as the rupee remains above that level, the likelihood of a rally is high. Hence, traders can buy rupee with tight stop-loss.
Supports: 75.6 and 75.8
Resistances: 75.3 and 75.15
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