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The Indian rupee (INR), after closing flat on Thursday, opened on a weak footing today against the US dollar (USD). However, it looks positive and has now moved higher; it is testing the resistance at 75.15. If the resistance is breached, INR will most likely appreciate to 75 — a critical level. A breakout of this level can attract more buying interest. On the other hand, if the local currency weakens, the nearest support is at 75.3. Below this level, 75.5 can be a good base.
Foreign portfolio investors (FPI) net sold assets worth ₹1,091 crore (equity and debt combined) yesterday. With that, the net outflow for the week is now at a little over ₹2,650 crore. If FPIs continue to be sellers today, it can weigh on the Indian currency.
Dollar index
After posting losses in the past few trading sessions, the dollar index marginally gained on Thursday. It is now hovering around 96.25 and a decisive breakout of this level can take the index to the resistance band between 96.9 (21-day moving average) and 97. But if the resistance at 96.25 holds, the index could fall to 96.
Trade strategy
After opening with a gap-up, the INR immediately recovered, indicating a positive bias. Also, the dollar index is trading near a resistance level. For the INR, 75.15 can be a hindrance. So, traders can go long on the INR with tight stop-loss if it breaches 75.15.
Supports: 75.3 and 75.5
Resistances: 75.15 and 75
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