BL Research Bureau

The rupee (USD) appreciated last session and gained one-fifth of a per cent as it closed at 73.02 versus Tuesday’s close of 73.17 against the dollar (USD). Extending the forward move, the domestic unit has opened with a gap-up at 72.96. If INR can remain above the key level of 73.00, it can establish another round of uptrend wherein it can appreciate to 72.75 and possibly to 72.50. But if the rupee falls back below 73.00 and declines, it can find support at 73.15 and 73.25.

As the market was trading positively in the past session, the foreign portfolio investors (FPI) remained buyers. That is, the net inflow of FPIs on Wednesday stood at ₹2,289 crore (equity and debt combined). Thus, the net investment for the week so far have gone up to nearly ₹3,200 crore. This has been a supporting factor for the rupee and as long as the inflows are steady, it can put an upward pressure on the Indian currency.

Dollar index

The dollar index, which attempted to recover yesterday, faced resistance at 90.70. It declined from that level and closed at 90.43. Following this, it has begun today’s session slightly on the backfoot as it has inched down to 90.30. The overall trend is bearish and so, the index is likely to fall further. Support levels can be spotted at 90.00 and 89.50. A falling dollar index can be positive for the rupee.

Trade strategy

The rupee has opened with a gap-up and consequently moved slightly above the key level of 73.00. This is a positive sign and the dollar index is indicating that the greenback could depreciate. So, traders can be cautiously bullish and go long in INR with a tight stop-loss.

Supports: 73.15 and 73.25

Resistances: 72.75 and 72.50

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