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The rupee (INR) has begun today’s session marginally lower at 73.49 against the dollar (USD). Since 73.5 is a support level, INR is likely to gain from here. If it appreciates, it can face hindrance at 73.3 and 73.15. But if the local currency weakens and breaches the support at 73.5, it can decline to 73.7 and possibly to 74.
As the market witnessed significant selling pressure, the Foreign Portfolio Investors (FPI) remained sellers as well. The net outflow on Monday stood at ₹540 crore (equity and debt combined). However, the rupee managed to stay flat despite considerable sell-off. If the bearish bias in the market persists, the domestic unit can come under pressure today.
Dollar index
The dollar index gained sharply yesterday on the back of the support at 93, where the 21-day moving average coincided and posted a gain of about 0.7 per cent. Currently trading at around 93.5, it tests the 50-day moving average. On the upside, the index faces strong resistance at 94, and it should break out of that level to establish a sustainable rally. Until then, it is equally likely that bears can regain traction.
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The rupee, after opening marginally higher, is showing a bullish bias. Also, 73.5 is a good support. Hence, for intraday, traders can buy rupee in declines with stop-loss at 73.5.
Supports: 73.5 and 73.7
Resistances: 73.3 and 73.15
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