Technical Analysis

Go long above 75.9

Akhil NallamuthuBL Research Bureau | Updated on April 15, 2020 Published on April 15, 2020

The rupee (INR) has opened higher today, at 75.97 versus its previous close of 76.27 against the dollar (USD). The domestic currency is now hovering around an important level of 76. If the rupee sustains above that level, it can advance towards 75.7 and 75.4 today. On the other hand, if it weakens, the immediate support can be spotted at 76.3; the subsequent support is at 76.55 – its lifetime low.

On Monday, the net outflow of the Foreign Portfolio Investments (FPI) was about ₹1,243 crore (equity and debt combined). As long as the FPI continues to sell, the local currency will face a sustained downward pressure.

Inflation

The Consumer Price Index (CPI) data released on Monday shows that the inflation eased in the month of March. The CPI for the month has come down sequentially to 5.91 per cent compared to 6.58 per cent in February. But it stays higher compared to the same month of the previous year, wherein it stood at 2.86 per cent. Notably, the consumer food price index has dropped to 8.7 per cent from previous month’s 10.8 per cent.

Dollar index

The dollar index, extending its downswing from the previous week, has dropped below the 50-day moving average. Currently trading at 98.9, the index is likely to moderate further. On the downside, 98.3 can be a support. A break below that level can result in another leg of downtrend, which can be favourable for the Indian unit.

Trade strategy

Though the rupee is trading higher today, it is currently trading around the key level of 76. It should sustain above 76 for the bulls to take charge. Traders can initiate fresh long positions in rupee with stop-loss at 76.1, if it breaks out of 75.9

Supports: 76.3 and 76.55

Resistances: 75.7 and 75.4

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Published on April 15, 2020
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