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The rupee (INR) posted a marginal gain of 6 paise last session as it ended the session at 72.69 versus last Friday’s close of 72.75 against the dollar (USD). Following this, it has opened a little higher at 72.65 today. The trend is clearly up and even if there is no sharp rise, the domestic currency has been managing to move up gradually.
Currently trading at 72.65, the nearest resistance level can be spotted at 72.50, above which INR can appreciate to 72.35. But if it weakens from here, there is an immediate support at 72.70, with subsequent support at 72.80. Notably, the rupee can trade with bullish bias so long as it remains above the critical level of 73.
The foreign portfolio investors (FPIs) remained net buyers on Monday as they poured in net investments of a considerable ₹1,234 crore. The FPIs have been positive in the recent month and more inflows are likely to continue going ahead and such foreign flows is a positive factor for the Indian currency.
Dollar index
The dollar index closed flat last session at 90.48. Nevertheless, it has opened with a gap-down today and is currently trading at 90.30. While the current level can be a support for the index, it is likely to be breached sooner or later as the major trend is bearish and it has moved below the 50-day moving average. A fall in the dollar index means that the greenback is depreciating and this can help in lifting INR against USD.
Trade strategy
The rupee has begun today’s session marginally higher and is now trading around 72.65. The dollar looks weak and the rupee is trading above support levels, hinting at possible appreciation in INR. Hence, traders can go long in rupee for intraday with tight stop-loss.
Supports: 72.70 and 72.80
Resistances: 72.50 and 72.35