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BL Research Bureau
The rupee (INR), after opening with a considerable gap-down at 72.92 in the past session, it recouped some of its losses and ended the session at 72.75 versus preceding day’s close of 72.69 against the dollar (USD). But today, the local currency has opened flat at 72.76. From the current level, 72.70 and the 72.80 are the immediate resistance and support level respectively, and today’s intraday movement can depend on which of these levels is breached first.
A breakout of 72.70 can turn the intraday bias bullish, possibly lifting the rupee to 72.50 whereas a downward breach of the support at 72.80 can weigh on INR dragging it towards the crucial support of 73.00.
Even though the market was under a bit of pressure the last session, the foreign portfolio investors (FPI) remained bullish. The net investments on Wednesday stood at ₹1,008 crore and thus, the net inflow for the week now stands at ₹3,386 crore. As long as the inflows are strong, the rupee is less likely to depreciate.
Dollar index
The dollar looked bullish the last session, and as a result, the dollar index gained half a per cent and closed at 90.95 versus Tuesday’s close of 90.51. Today, it has opened flat and is staring at the resistance at 91.00. If this level is breached, it can appreciate to 91.50, but a fall from here can pull the dollar index back to 90.50.
Trade strategy
The rupee opened flat today and is trading in the band between 72.70 and 72.80. The trend for the day can remain uncertain until INR stays within these levels. On the other hand, the dollar index faces a hurdle, raising doubts over the continuation of yesterday’s rally. Considering these factors, traders can stay on the fence now and initiate trade a with a tight stop-loss along the direction of the break of the range 72.70 and 72.80.
Supports: 72.80 and 73.00
Resistances: 72.70 and 72.50
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