On Monday, the rupee (INR) closed below the critical level of 74 against the dollar (USD). It ended the session at 74.08 after registering an intraday low of 74.18. A close below 74 means that further weakening is highly likely. As on Monday, the year-to-date loss of the Indian unit versus the dollar is about 3.8 per cent.
According to the data by by National Securities Depository Limited (NSDL), the Foreign Portfolio Investments (FPI) net sold ₹3,620 crore on Monday. Thus, the net outflow for the month has increased to ₹16,758 crore.
Dollar index
The dollar index recovered sharply yesterday and closed at 96.41 versus the previous close of 94.89. While this may not be an indication of a trend reversal, a decisive break out of the resistance at 96.5 can lift the index. Above 96.5, the resistance is at 96.8. As it trades at 96.23 currently, the nearest support levels are 96 and 95.15.
Trade strategy
The rupee has opened higher at 73.86 compared to prior close of 74.08. However, the trend is bearish and so the recovery might be limited; 73.5 is a considerable hurdle. So, for intraday, traders can short rupee on rallies with 73.5 as the stop-loss.
Supports: 74 and 74.25
Resistances: 73.5 and 73.3
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.