During the last session, the rupee (INR) settled lower by 8 paise against the dollar (USD), closing the session at 74.27 after making an intraday low of 74.33. Nevertheless, the local currency has opened with a gap-up at 74.13. If INR appreciates from the current level, it will face a hurdle at 74. Above that level, 73.85 could be the resistance. But if weakens, immediate support levels are at 74.3 and 74.5.

Foreign inflows look to be steady even as the market was down on Thursday. The net investments of Foreign Portfolio Investors (FPI) yesterday stood at Rs 1,180 crore (equity and debt combined). Consistent FPI inflows can help the rupee stay firm against the dollar.

Dollar index

The dollar index, which opened with a gap-up in the last session, weakened towards the end of the session, posting an intra-day loss. Thus it has registered a loss for six straight trading sessions. Even today, the index inched down and is currently hovering at the support of 92.2. Since the price action is exhibiting a bearish bias, the likelihood of the index breaking below this support is high. While 92 is the nearest support below 92.2, the index will most likely decline to 91.75.

Trade strategy

The rupee opened today’s session on the front foot and has gained by 13 paise so far. Also, the dollar index hints at a further decline, indicating that the dollar is likely to trade lower today. Considering these factors, traders can be bullish on the rupee today and initiate fresh long positions with a stop-loss at 74.3.

Supports: 74.3 and 74.5

Resistances: 74 and 73.85

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