Today, the rupee (INR) has opened a bit stronger against the dollar (USD) on the back of the support at 76. It began the session at 75.77 versus yesterday’s close at 75.91. The year-to-date loss stands at about 6.1 per cent.
The rupee will face a hindrance at 75.6 on the upside; a breakout of that level can lift the local currency to 75.4. But if the rupee breaks below the key support at 76, it can witness considerable selling pressure which could drag the exchange rate to 76.3 and 76.5.
On Monday, the domestic unit posted a loss of about half a per cent against the green back. However, it managed to end the session above the important level of 76. The net outflow of the Foreign Portfolio Investments (FPI) had a negative impact on the rupee. The net out flows yesterday stood at ₹2,513 crore (equity and debt combined).
Dollar index:
The dollar index declined yesterday and fell back below the 100 level. Notably, the 21- and 50-day moving averages coincide at 100. The index remains within the range between 98.8 and 101 and it should breach either of these levels to establish a trend.
Trade strategy:
Though the rupee opened with a gain today, the price action in the past few trading sessions indicate a bearish bias. Hence, the rally might not be sustainable until it breaches 75.6 decisively. So, traders can make use of intraday rallies to short the rupee and place stop-loss at 75.6.
Supports: 76 and 76.3
Resistances: 75.6 and 75.4
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Published on
May 19, 2020
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