BL Research Bureau

The rupee (INR) posted a marginal gain last session as it closed at 73.15 versus its preceding close of 73.25. Since 73.15 can be a hurdle, INR has begun today’s session a bit lower at 73.18. If it can rally past 73.15, it will most likely touch the crucial level of 73. A breakout of this level can result in a strong rupee rally.

But if the domestic currency depreciates from the current level, it can find support at 73.25. Below this level lies the support band of 73.40 and 73.50.

Despite the market ending on a flat note yesterday, the foreign portfolio investors (FPI) remained buyers. The net inflow on Wednesday stood at nearly ₹1,880 crore (equity and debt combined). With that, the net investments for the week by FPIs have risen to about ₹5,600 crore. Consistent foreign inflows have kept the rupee steady against the dollar.

Dollar index

Bouncing off the support at 90, the dollar index appreciated the last session and ended at 90.36. The 21-day moving average coincided at 90, making it considerable support. Currently trading around 90.40, it has strong resistance at 90.60. If this level is breached, it can move upwards to 90.70 – a resistance level. Subsequent resistance is at 91. Since the overall bias remains bearish for the dollar, until the resistance at 91 is taken out, the rally cannot be considered as a bullish trend reversal, even for the short-term.

Trade strategy

The rupee is currently trading around 73.15, and until it breaches either 73 or 73.25, the near-term trend will remain uncertain. So, until then, traders can use a range trading strategy.

While immediate resistance above 73 is at 72.75, the nearest support below 73.25 can be seen at 73.40.

Supports : 73.25 and 73.40

Resistances: 73.00 and 72.75

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