Technical Analysis

Daily Rupee call: Rupee may bounce off 73.7

Akhil Nallamuthu | Updated on September 09, 2020

The rupee (INR) ended the session with a loss of 0.35 per cent at 73.6 on Tuesday versus the previous day’s close of 73.34. A close below the support level of 73.5 could hold a bearish precedent for the near-term. Today, beginning at 73.68, INR has its immediate support at 73.7. If it depreciates below this level, it could possibly decline to 74. But if the local currency sees a recovery, it might face hindrance at 73.5 and 73.4.

The market witnessed a sell-off in the second half of yesterday’s session. Data shows that Foreign Portfolio Investors (FPI) sold a significant amount of domestic assets. The net outflow on Tuesday was Rs 1,056 crore (equity and debt combined). If this trend continues, the Indian currency can come under pressure against the dollar.

Dollar index

The dollar index gained nearly one per cent yesterday and closed at 93.54. It is currently hovering around the important level of 93.5. Further advances will be uphill, with a significant hurdle at 94. The 50-day moving average lies at that level, making it a strong resistance. But a break-out of 94 can turn the outlook positive, where the index could probably rally to 94.65 and then 95.15. Until then, sustainability of the rally will be in question.

Trade strategy

The rupee has a support at current levels and according to the dollar index chart, the trend has not turned completely in favour of the greenback. So, for intraday, rupee can be expected to gain from current levels. Hence, traders can buy the rupee with a tight stop-loss.

Supports: 73.7 and 73.85

Resistances: 73.5 and 73.4

Published on September 09, 2020

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