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The rupee (INR) weakened on Monday and closed lower at 73.29 after facing resistance at 73.15 against the dollar (USD). Today the local currency has begun the session with a gap-up open at 73.16. However, the rupee should break resistance at 73.15 to carry forward the positive bias. A breakout of 73.15 can take the domestic currency to 73. Beyond that level, it can rally to 72.8. However, if INR declines from here, it can depreciate to 73.3 and 73.5.
As the market was positive yesterday, foreign portfolio investors (FPI) seem to share the same sentiment even though the fund flows were not at significant levels. That is, the net inflow on Monday was recorded at Rs 236 crore (equity and debt combined). If this trend continues, it could help the rupee firm up against the greenback.
Dollar index
The dollar index registered a loss last session and as a result fell below the 21-day moving average. Also, it remains below the key level of 94. Hence, the likelihood of a fall from current levels looks good. While 93.25 is the immediate support, subsequent support can be spotted at 93. A break below 93 can intensify the sell-off.
Trade strategy
Even though the rupee has begun today’s session with a gap-up, it faces a strong hindrance at 73.15; INR can depreciate on the back of this resistance. So, traders can sell INR for intra-day with stop-loss at 73.
Supports: 73.3 and 73.5
Resistances: 73.15 and 73
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