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The rupee (INR) has begun today’s session higher at 75.38 versus the previous close of 75.57 against the dollar (USD). The local currency seems to have taken support at 75.6 and until it remains above that level, the likelihood of a decline is low. Notably, the rupee has been oscillating between the important levels of 75 and 75.6 since the beginning of the month.
If the Indian currency appreciates from the current level, it might face resistance at 75.3 and 75.15. On the other hand, if the rupee slips below 75.6, it can witness considerable sell-off.
The Foreign Portfolio Investors (FPI) were net buyers on Thursday too, continuing with the recent trend. The FPI net inflows yesterday was ₹2,905 crore (equity and debt combined). But the Indian currency closed flat after registering an intraday high 75.37.
Dollar index
The dollar index fell yesterday and closed below the support level of 97. The price action in the daily chart shows a clear downtrend. Thus, the index is likely to decline from current levels towards the support at 96.4. Subsequent support is at 96.
Trade strategy
The rupee is exhibiting a bullish price action following a gap-up open. Also, the risk-reward ratio favours long positions as the domestic currency is trading near a support. Hence, traders can buy the rupee on declines with stop-loss at 75.6.
Supports: 75.6 and 75.8
Resistances: 75.3 and 75.15
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