Technical Analysis

Daily Rupee call: INR testing resistance at 73.7

Akhil Nallamuthu | Updated on October 28, 2020

BL Research Bureau

Gaining by nearly 0.2 per cent, i.e. by 14 paise against the dollar (USD), the rupee (INR) closed at 73.71 on Tuesday. From the intraday low of 73.95, it appreciated by 24 paise.

Today, the rupee opened the session flat at 73.7 – a resistance. If the rupee crosses over this level, it can rally to 73.5. Above this level, 73.3 can be the hurdle. But if INR weakens from here, it is likely to be dragged to 74.

Since the market was trading with positive sentiment yesterday, the Foreign Portfolio Investors (FPIs) were net buyers. Their net investments stood at a significant ₹3,515 crore (equity and debt combined). This helped lift the domestic currency in yesterday’s session. Further inflows from FPIs can keep the rupee afloat.

Dollar index

The dollar index, which saw a decline, recovered towards the end of the session and closed above the resistance of 93. Currently trading around 93.15, it faces a resistance at 93.35; interestingly, both 21- and 50-day moving averages coincide at this level. But since the major trend is bearish, the rally might lose strength as it inches up. Nevertheless, a breakout of 93.35 can take the index towards 94. Support levels below 93 are at 92.75 and 92.5.

Trade strategy

Even as the price action of the currency pair USDINR seems to be in favour of INR, there is considerable resistance at 73.7. Hence, traders can wait for now and initiate fresh rupee longs if only it decisively breaches 73.7.

Supports: 74 and 74.1

Resistances: 73.7 and 73.5

Published on October 28, 2020

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