The rupee (INR), which ended yesterday’s session at 75, opened on a weaker note at 75.14. The local currency seems to be sustaining below the support at 75, which increases the possibility of further weakening. Also, it has now slipped below the support of 75.15.
On further weakening, the rupee might head southwards to 75.4, below which the support is at 75.6. On the other hand, if the INR appreciates, 75 can be a strong hurdle. A decisive break out of this level can take the exchange rate to 74.8. Resistance above that level is at 74.6.
Foreign portfolio investors (FPI) were net buyers yesterday, though the amount was meagre. The net inflow on Thursday stood at ₹212 crore (equity and debt combined). A significant inflow can possibly limit the downside for the rupee, which is now trading below the crucial support of 75.
Dollar index
The dollar index, which declined initially yesterday, took support of 96.25 and bounced intraday, closing the session in the green. Currently trading at 96.85, it faces a considerable resistance at 97, which coincides with the 21-day moving average. A breakout of this level can lift the index to 97.75, which can weigh on the Indian currency.
Trade strategy
The rupee, after opening with a gap-down, has slipped below the support at 75.15 as well. Thus, the intraday trend is likely to be bearish. Hence, traders can short INR on rallies with stop-loss at 75.
Supports: 75.4 and 75.6
Resistances: 75 and 74.8
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