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Today, the rupee (INR) has begun the session on a flattish note against the dollar (USD). It has opened at 75.75 versus its previous close of 75.72 and thus the local currency has slipped below the support of 75.6.
If the weakness persists, the rupee might depreciate further to 75.8 and 76 – a critical support. A break below 76 can result in a sharp sell-off. On the other hand, if INR gains and rallies above 75.6, it could advance to 75.4, above which it could move to 75.15.
Despite the market declining yesterday, Foreign Portfolio Investors (FPI) were net buyers of domestic asset. The net inflow on Wednesday stood at ₹1,767 crore (equity and debt combined), taking the week’s tally to about ₹2,360 crore. The buying trend of the FPIs can help rupee gain against the greenback.
Dollar index:
After witnessing decline for two consecutive sessions, the dollar index posted a gain yesterday. It bounced after taking support at 96.5 and currently trading at 97.25, it has moved above the resistance of 97. On the upside, it might rally to 97.75, which is a substantial resistance.
Trade strategy:
Though the rupee remains below the support of 75.6, the price action appears favourable for the Indian currency hinting at possible intraday rally. Hence, traders can buy the rupee with stop-loss at 75.9.
Supports: 75.8 and 76
Resistances: 75.6 and 75.4
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