Daily Rupee call: INR positive above 72.80

BL Research Bureau

The rupee (INR) closed flat last session at 72.86 versus the dollar (USD). Nevertheless, it has been trading above the key level of 73 since the beginning of this month, giving it a bullish bias. Today, INR has opened with a gap-up at 72.79, affirming the positive inclination. It can strengthen further from the current level, and the nearest resistance can be spotted at 72.65. A breakout of this level can lift the local currency to 72.50. But in case if the rupee depreciates, 72.80 can provide support. But a breach of this level can drag INR to 73. Since the bias is bullish, 73 will most likely arrest any decline.

The foreign inflows have been a significant factor in keeping the rupee steady. The foreign portfolio investors (FPI) on Thursday made net investments of ₹944 crore and therefore, the total net inflow for the week has gone up to a little over ₹5,900 crore. This trend is likely to continue and this can keep the rupee stable.

Dollar index

Since the dollar has been facing the pressure of late, the dollar index has declined since the past few sessions. It is currently hovering at the 50-day moving average at 90.50, which is a good support. If the index can rebound, it can appreciate to 91 and then probably retest the prior high of 91.60. But if it falls below 90.50, sell-off can accelerate and it is likely to decline to 90 and then possibly to 89.50. Such a scenario can be conducive for the Indian currency.

Trade strategy

The rupee, trading above the important level of 73, has also managed to stay above 72.80 for the past couple of sessions. Also, the dollar looks to be weak now. Given these factors, traders can stay positive about the rupee and buy for intraday with tight stop-loss.

Supports: 72.80 and 73.00

Resistances: 72.65 and 72.50