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BL Research Bureau
The rupee (INR), after gaining marginally on Monday, has opened today’s session on a flat note against the dollar (USD). The local currency has begun at 75.48 versus yesterday’s close 75.58 and the year-to-date loss of INR is now at 5.7 per cent.
The domestic unit has an immediate resistance at 75.4; a breakout of this level can lift the rupee to 75.15. On the other hand, if it weakens, it is likely to depreciate to 75.6, below which it could decline to 75.8.
Foreign Portfolio Investors (FPI), who have been net buyers this month, sold domestic assets yesterday. The net outflow yesterday stood at ₹1,937 crore (equity and debt combined). However, over the past several sessions, FPIs have been pumping in money and so yesterday’s sell-off could be temporary.
Dollar index:
The dollar index was sluggish yesterday as it continues to chart sideways trend. Hovering around 97.5, it has a substantial hurdle at 97.75. While the breakout of this level can result in a sharp up-move, the index can be biased to a downward motion until it remains below 97.75.
Trade strategy:
The rupee that opened higher today is facing a resistance at 75.4, from where it declined twice in the past week, indicating that the resistance is strong. On the back of this, traders can short INR with a tight stop-loss for today.
Supports: 75.6 and 75.8
Resistances: 75.4 and 75.15
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