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The rupee (INR), after opening lower yesterday, attempted to rally against the dollar (USD). But it faced downward pressure as it advanced and ended Thursday’s session at 73.31 versus its previous close of 73.22.
The domestic currency is the weakest Asian currency for the week, having lost 1.58 per cent. Its year-to-date loss against the dollar stands at about 2.7 per cent as of yesterday.
Despite the rupee trading with a bearish bias, the one-year forward spread of USDINR has dropped to 288 points compared to Wednesday’s closing level of 296 points. On the other hand, the net Foreign Portfolio Investments (FPI) were a positive ₹642 crore yesterday, according to the latest data from the National Securities Depository Ltd (NSDL).
Dollar index
The dollar index has resumed the downtrend after a minor corrective rally. The index has slipped below support at 97 and the price action indicates that a further correction is on the cards. On the downside, the nearest support can be spotted at 96.6 with 96.35 as the subsequent support. Below that level, it might test support at 96.
Trade strategy
The rupee has opened the session very weak, at 73.9 versus yesterday’s closing level of 73.31. The currency pair might witness extreme volatility today and so traders are recommended to stay on the sidelines.
Supports: 74 and 74.25
Resistances: 73.5 and 73.3
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