The rupee (INR), which gained half a per cent against the dollar (USD) yesterday, has opened today’s session marginally higher. It has begun the session at 75.6 versus Tuesday’s close of 75.64. Notably, 75.6 is a resistance for the local currency.
On the back of the prevailing bullish bias, if INR appreciates and rallies above 75.6, it will face resistance at 75.4. The immediate resistance above that level can be seen at 75.3. But if INR declines from current level, it might find support at 75.8. A break below that level can drag the exchange rate to 76 – a critical support for the rupee.
Even as the market witnessed a strong uptrend yesterday, the amount of Foreign Portfolio Investors (FPI) buying was meagre. Though the FPIs were buyers, the net inflow on Tuesday was about ₹168 crore (equity and debt combined). Thus, the total inflow is about ₹592 crore in the first two trading sessions of this week. If the inflow increase in upcoming sessions, it can help the domestic currency retain the upward bias.
The dollar index which saw selling pressure on Monday, declined yesterday as well. It closed below the support of 97, opening the door for further weakening. Currently trading at 96.6, the support levels can be spotted at 96.25 and 96. If the index extends the downtrend, it could be positive for INR.
The rupee looks bullish and the dollar index hint at further decline in the dollar. But the rupee has a resistance at 75.6. So, traders can go long in rupee with tight stop-loss if it rallies past 75.6.
Supports: 75.8 and 76
Resistances: 75.6 and 75.4