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The rupee (INR) opened higher at 75.52 against the dollar (USD) on Friday, as against the previous close of 75.72. Thus, it is now above the resistance level of 75.6, and, so might extend its gains further.
The nearest resistance can be spotted at 75.4, above which the domestic currency might appreciate to 75.15. But if it declines and breaks below 75.6, it will most likely descend towards the support of 75.8. Subsequent support is at 76.
Continuing with the positive trend for the week, Foreign Portfolio Investors (FPI) remained buyers on Thursday as well. The inflow of FPIs yesterday was about ₹1,050 crore (equity and debt combined); with that, net inflow for the week has increased to ₹3,410 crore. The buying trend has kept the rupee afloat and more inflows can help it gain ground against the greenback.
Dollar index
The dollar index, which went up marginally yesterday, has managed to stay above the support of 97. But a lack of trend can be seen in the daily chart and the index might be heading towards a sideways trend, possibly trading within 96.4 and 97.75. So, until either of these levels is breached, the next leg of trend will remain uncertain.
Trade strategy
Since the rupee has moved back above the support of 76, it could be inclined towards a bull trend, at least for the rest of the day. Hence, traders can initiate fresh long positions in INR with stop-loss at 75.7
Supports: 75.6 and 75.8
Resistances: 75.4 and 75.15
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