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The rupee (INR) ended Tuesday’s session flat at 72.69 versus the dollar (USD). However, it has opened today with a considerable gap-down, i.e., at 72.92. But since then, it has recovered a bit and is now trading around 72.85. If the rupee depreciates on the back of the weak opening, it can find support at 73.00. This level is a strong base,, and the likelihood of this being breached is low. But if invalidated, the short-term trend could turn against the Indian currency. On the other hand, if INR gains from the current level, it can face hindrances at 72.80 and 72.70. If these resistances are taken out, it can appreciate to 72.50.
The rupee stayed flat the last session despite good foreign inflows. – the net inflow of the foreign portfolio investors (FPI) on Tuesday was recorded at ₹1,144 crore. This could be because of the overall market facing a bit of downward pressure. Nonetheless, firm and consistent FPI inflows can keep up the rupee against the greenback.
Dollar index
The dollar index that stayed weak in the first half of yesterday was lifted by the bulls resulting in a quick rally. That is, after marking an intraday low of 90.12, the index reversed direction and ended the day at 90.51 versus preceding day’s close of 90.48. Thus, it managed to close above the support of 90.50, where the 50-day moving average coincide. Carrying over the positive momentum, the dollar index has begun with a gap-up today and is now trading near 90.65. However, since the session open, it has been inching down and the rally seems to lose momentum. A fall be 90.60 can result in a bearish day for the dollar.
Trade strategy
Though the rupee opened on the back foot, it is above the crucial support level of 73. Moreover, the overall trend is bearish, and the dollar index is hinting at the possibility of the dollar being dragged down. These factors are favourable for the domestic currency. So, despite a weak open, traders can stay positive about INR and buy intraday with a stop-loss at 72.95.
Supports: 73.00 and 73.15
Resistances : 72.80 and 72.70
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