Technical Analysis

Daily Rupee call: INR testing the resistance at 73.50

Akhil Nallamuthu | Updated on December 16, 2020

BL Research Bureau

The rupee (INR) posted a marginal loss last session as it ended at 73.64 versus 73.57 against the dollar (USD) on Tuesday. That means, the consolidation range 73.50 and 73.85 still holds, and the currency pair of USDINR is trending sideways.

Todays, INR has opened with 17 paise gap-up, and it is currently testing the resistance of 73.50. A breakout of this level can lift the domestic currency to 73.40 with subsequent resistance at 73.15. But if the rupee descends, the immediate support can be 73.70. Below this level lies the support of 73.85.

It was another day where the foreign portfolio investors (FPI) pumped in a considerable amount of money into the domestic market. The net inflow of the FPIs stood at ₹2,484 crore (equity and debt combined). Thus, the net investments in the first two sessions of the week stand at nearly ₹4,750 crore. Steady inflows can keep the domestic unit afloat against the greenback.

Dollar index

The dollar index posted a loss last session as it ended at 90.47 versus 90.71, thus closing in the red for the second straight session. Today, it has been looking weak and is currently trading around 90.43, thus slipping below the support at 90.50. Hence, the index is likely to depreciate to 90. A break below this level can intensify the sell-off, and this can be positive for the Indian currency.

Trade strategy

The rupee has opened on the front foot today and currently testing the resistance at 73.50. Even as the dollar index is hinting at a further weakness in the dollar, which is good for the rupee, traders need to wait for INR to breach 73.50. That is, buy INR with tight stop-loss if it breaks out of 73.50.

Supports: 73.70 and 73.85

Resistances: 73.50 and 73.40

Published on December 16, 2020

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