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The rupee (INR) opened Thursday’s session exactly at yesterday’s closing of 74.83 against the dollar (USD). So, the sideways trend still remains and the price action in the daily chart looks sluggish. The local currency should either breach 74.7 or 75 to provide some certainty about the next price swing.
If INR appreciates and breaches resistance at 74.7, the outlook will turn bullish and it can advance to 74.5. Resistance above that level is at 74.35. But if the rupee declines below 75, it can bring in more sellers and it might weaken the rupee to 75.15. Subsequent support is at 75.3.
Continuing with the positivity, the Foreign Portfolio Investors (FPI) remained buyers on Wednesday as they net bought domestic assets worth ₹350 crore (equity and debt combined). This has taken the net inflow for the week to just above ₹1,650 crore. This is helping the rupee stay firm against the greenback.
Dollar index
The dollar index fell yesterday on the back of the resistance at 94. Thus, it stays within the range between 93.5 and 94. Until either of these levels is breached, the next leg of trend cannot be confirmed. Moreover, the daily chart indicates that the index is likely to continue the consolidation phase in the near-term.
Trade strategy
The daily chart of the currency pair USDINR and the dollar index looks sluggish. So, the rupee is likely to remain flat for the day. Hence, traders can stay on the fence until either 74.7 or 75 is breached.
Supports: 74.9 and 75
Resistances: 74.7 and 74.5
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