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The rupee (INR) has begun the session today on a weaker note at 75.9 versus yesterday’s close of 75.71 against the dollar (USD). Nevertheless, the exchange rate remains in the range 75.6 and 76, within which it has been oscillating for the past two weeks.
Currently trading around 75.9, the domestic currency has a substantial support at 76. A break below this level can intensify sell-off. But if it takes support and strengthens, it might advance towards the resistance at 75.6. A breakout this level can take the exchange rate to 75.4.
On Wednesday, the Foreign Portfolio Investors (FPI) were net sellers. The net outflow stood at nearly ₹335 crore (equity and debt combined). Despite this, the rupee ended yesterday’s session flat.
Dollar index
The dollar index looked weak yesterday and closed the session slightly lower. It is currently hovering around the important support of 98.8. If this level is breached, the index could face considerable downward pressure, which can have a positive impact on the rupee.
Trade strategy
Even though the local currency has opened lower against the greenback, it has a strong support at 76. Since it is trading near that support, risk-reward ratio favours taking long positions in the rupee. Traders can buy the rupee for intraday with stop-loss at 76.1
Supports: 76 and 76.3
Resistances: 75.6 and 75.4
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