Technical Analysis

Daily Rupee call: INR can remain range-bound

Akhil Nallamuthu BL Research Bureau | Updated on November 13, 2020

The rupee (INR) settled 28 paise lower against the dollar (USD) as it ended the last session at 74.65 versus Wednesday’s close of 74.37. Thus, it has closed below the support level of 74.6 – a bearish indication.

But today, the domestic currency has opened marginally higher at 74.62 and is hovering around the important level of 74.6. However, for the rally to sustain, INR should decisive breach 74.6. If it rallies past this level, it can advance to 74.25 and subsequently, it can possibly appreciate to 74.25. But if the rupee falls from the current levels, it is likely to decline to 74.75 and 75.

Even though the market remained weak yesterday, the Foreign Portfolio Investors (FPI) continued to buy domestic assets. The net investments on Thursday stood at ₹1,514 crore (equity and debt combined). Thus, the net inflow for the week has gone up to about ₹17,900 crore. The foreign inflows has been acting as a cushion for the local currency.

Dollar index

The dollar index was largely flat yesterday trading around the key resistance level of 93. Even today, it has opened on a flat note. Notably though, the overall trend is bearish. However, of late it has been oscillating within 92.6 and 93.2 and unless either of these levels are breached, the next leg of trend cannot be confirmed. Resistance above 93.2 is at 93.6 whereas below 92.6, the support can be spotted at 92.2.

Trade strategy

The rupee has been under pressure for the past few trading sessions and it closed below the support of 74.6 yesterday, hinting further depreciation from the current level. However, the dollar index indicate sluggish dollar movement. Because of this the currency pair USDINR is likely to consolidate in today’s session.

Fresh positions are not recommended until either 74.6 or 74.75 are breached. Above 74.6, INR can appreciate to 74.2 whereas a break below 74.75 can drag it towards 75.

Supports: 74.75 and 75.00

Resistances: 74.60 and 74.25

Published on November 13, 2020

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