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BL Research Bureau
The rupee (INR) has opened on a weak note today at 76.28 versus its previous close of 76.15 against the dollar (USD). The local currency continues to stay below the important level of 76, hinting at a considerable bearish bias.
The rupee appears weak and even though 76.3 can be good support, on the back of which it might bounce. However, 76 is a strong hurdle. But if INR slips below 76.3 as a result of prevailing downward bias, the immediate support can be 76.5. On the other hand, if the domestic currency breaks out of 76, it might rally quickly towards 75.8 and 75.6.
The Foreign Portfolio Investors (FPI), though marginal, were net buyers yesterday, providing some relief to the Indian currency. The inflow was at ₹366 crore (debt and equity combined). Nevertheless, INR is on the back foot and maybe a huge inflow could turn the tide in the rupee’s favour.
Dollar index:
The dollar index rallied as USD was one of the favourable currencies in yesterday’s trade. It bounced off the support at 97, and it closed the session at 97.44. Now, the index faces a resistance band between 97.6 and 97.75. A break out of this level could lift the index to 98 and 98.4. But if it declines because of the resistance band, it can be favourable for INR.
Trade strategy:
Even as the rupee is trading with a bearish bias, 76.3 is support level. Considering this, traders can initiate new short positions in rupee with tight stop-loss if it slips below 76.3.
Supports: 76.3 and 76.5
Resistances: 76 and 75.8
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