Technical Analysis

Daily Rupee call: INR likely to trade with positive bias

Akhil Nallamuthu | Updated on February 15, 2021

BL Research Bureau

The rupee (INR) settled 17 paise higher last week as it ended at 72.75 versus 72.92 against the dollar (USD). The domestic currency seems to hold comfortably above the key level of 73, and as long as it remains so, the bias will be bullish.

Following a positive close on Friday, the rupee has opened today’s session with a gap-up at 72.62. If the rally continues, it can touch 72.50, a resistance level. Subsequently, it can face hindrance at 72.35. But if it weakens, from here, the price band of 72.70 and 72.80 can offer adequate support. Below that level lies the critical base of 73.

The foreign inflows stay strong, and as per the National Securities Depository Limited (NSDL) data, the net investments in February so far stands at ₹21,904 crore, which is already higher than ₹14,631 crore in January. Equity remains the top destination for FPI inflows as it have received ₹20,593 crore this month. As long as the inflows continue, the rupee can remain steady against the dollar.

Dollar index

The dollar index ended last week with a loss because of the downward pressure that it faced early on. It ended the week at 90.48 versus preceding week’s close of 91.04. Today, the index look weak, and trading at 90.30, it is now marginally below the 50-day moving average (DMA). So, the likelihood of further decline is more, which can be positive for the Indian currency.

Trade strategy

The rupee has opened with considerable gap-up today thereby retaining the bullish inclination. Also, the dollar index looks weak, indicating that the dollar can remain under pressure today. Given these factors, rupee can trade with a positive bias today. Thus, traders can go long in the rupee with a tight stop-loss.

Supports: 72.70 and 72.80

Resistances: 72.50 and 72.35

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Published on February 15, 2021
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