Comments
Despite facing significant hurdles at 73.15 and 73.00, the rupee (INR) gained on Tuesdayand closed at 72.93 against the dollar, posting a gain of nearly half a per cent. A close above 73.00 is a bullish sign, and the local currency is likely to advance more.
On Wednesday, the rupee has opened flat following a positive close on Tuesday. If it continues to advance from here, the nearest resistance levels it can face are at 72.70 and 72.55. On the other hand, if bears regain traction and the INR slips below 73.00, it can decline to 73.15 and 73.30, which can offer support.
The domestic equity market was bullish on Tuesday, and aligning with this trend, the foreign portfolio investors (FPIs) pumped in significant amount of money following a net outflow on Monday. That is, the net investments by the FPIs on Tuesday stood at ₹2,802 crore. The net inflow for the week now stands at ₹1,308 crore. The foreign inflows have been a major contributor for a strong rupee and as long as this trend continues, the rupee can have an upper hand over the greenback.
Dollar index
The dollar index dropped on Tuesday and ended the session at 91.96 versus its previous close of 92.31, thus retracting below the resistance of 92.00. However, on Wednesday, it has opened marginally higher at 92.05 and is currently hovering at 92.15.
Since the last week of February, the trend in dollar index is clearly bullish and the decline on Tuesday could well be a correction. This means it could start moving up from here again; this can weigh on the Indian currency.
Trade strategy
The rupee has begun Wednesday’s session flat at 72.93. Even though the foreign inflows are providing good support to the local currency, the strengthening dollar, as indicated by the dollar index, could limit the upside.
However, according to the chart, 73.00 is a strong support and the rupee will exhibit bullish inclination until it stays above this level. So, traders can risk going long on the rupee for intra-day with a tight stop-loss.
Supports: 73.00 and 73.15
Resistances: 72.70 and 72.55
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.