Technical Analysis

Daily Rupee call: INR may face downward pressure

Akhil Nallamuthu BL Research Bureau | Updated on November 12, 2020 Published on November 12, 2020

The rupee (INR) ended the last session 20 paise lower at 74.37 against the dollar (USD). The price action on the daily chart looks bearish for the local currency as it hints at further depreciation.

Today, INR has opened marginally lower at 74.44. Since 74.4 is an important level, rupee bears can be at advantage. Further decline from the current level can drag the rupee to 74.5 – a support. Subsequent support can be spotted at 74.7. But if INR can move back above 74.4, it might appreciate to 74.25. Resistance above that level is at 74.

Continuing with the recent trend, the Foreign Portfolio Investors (FPI) were buyers yesterday.The net investments was recorded at ₹6,207 crore (equity and debt combined), taking the weekly tally to about ₹16,380 crore. However, the rupee shows weakness despite substantial foreign inflows, largely due to the global trend in the dollar, which has been bullish over the past few trading sessions.

Dollar index

The dollar index gained last session and closed marginally above the resistance of 93. It has been gaining since Monday because of considerable dollar demand. But the index lies below the 21-day moving average and the key barrier of 94. Notable resistance below 94 can be 93.4. Nevertheless, the trend looks positive and so, the index could advance from the current level, which can weigh on the local currency.

Trade strategy

Following quarter per cent loss on Wednesday, INR has opened marginally lower today versus USD. The domestic unit is hovering at the important level of 74. Since the trend has been negative since the beginning of the current week and the dollar shows signs of recovery, traders can be bearish on the rupee and initiate intraday short positions with a stop-loss at 74.2.

Supports: 74.50 and 74.70

Resistances: 74.25 and 74.00

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Published on November 12, 2020
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