BL Research Bureau

The rupee (INR) ended marginally higher at 73.58 compared to 73.64 against the dollar (USD) on Wednesday. Today, it has opened at 73.53 and inched above the key hurdle of 73.50. If the rally continues to extend, it can appreciate to 73.15. Subsequently, it can advance to 73. But if the local currency depreciates and slips below the 73.50, the nearest support it can find is at 73.70. Below that level, support is at 73.85.

The buying spree of the foreign portfolio investors (FPI) seems to continue as the net investments on Wednesday stood at ₹1,981 crore (equity and debt combined). Thus the net inflow for the week has gone up to about ₹6,730 crore. This has been strengthening the rupee recently, and as long as the inflows continue, the domestic currency has stay afloat against the dollar.

Dollar index

The dollar index has been on a steady decline since the beginning of the week, and it is currently testing an important level 90. If this level is breached, it can drop to 89.4. The subsequent support level is at 89. Notably, current price levels are the lowest in more than two years. The downtrend in the dollar index can be positive for the Indian currency.

Trade strategy

The rupee, after opening almost flat, has rallied past the resistance at 73.50, opening the door for further strengthening. Also, the dollar index shows that USD can weaken further. So, traders can be bullish on the rupee and buy on intraday declines with stop-loss at 73.60.

Supports: 73.50 and 73.70

Resistances : 73.40 and 73.15

Related Topics
comment COMMENT NOW