Technical Analysis

Daily Rupee call: INR might retain the upward bias

Akhil Nallamuthu BL Research Bureau | Updated on July 22, 2020 Published on July 22, 2020

Retaining the bullish bias, Rupee (INR) has opened higher today at 74.57 compared to yesterday’s close of 74.74. But immediately after the open, INR moderated slightly and now hovers around the resistance level of 74.65. If the local currency to able to decisively move above this level, it can appreciate to 74.5 and might advance to 74.35. But if the resistance at 74.65 stops the bulls, it could drag the exchange rate to 74.8. Below this level is the crucial support of 75.

A significant Foreign Portfolio Investors (FPI) buying was seen on Tuesday. Since they have largely been net sellers for the month, it added pressure on the domestic unit. But a net inflow of ₹2,265 crore (equity and debt combined) might indicate that FPI money have started to come in especially considering that the net inflow in the last two days amount to nearly ₹4,000 crore. This can have a positive impact resulting in the rupee gaining against the dollar.

Dollar index:

The dollar index witnessed a considerable fall yesterday as it posted a loss of nearly three-fourth of a per cent. It is currently testing the support of 95.15. While 95 can be the nearest support, the critical support is at 94.65 – its one-year low. If this level is breached, the index might see another sharp downswing, which can lift the Indian currency against the greenback.

Trade strategy:

As rupee registers higher highs and higher lows since past one week and now that the dollar index in hinting at a bear trend in dollar, the chances of INR gaining from current levels looks high. So, traders can buy rupee on minor intraday correction with stop-loss at 75.8.

Supports: 74.8 and 75

Resistances: 74.5 and 74.35

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Published on July 22, 2020
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