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BL Research Bureau
The rupee (INR) ended marginally higher at 74.09 against the dollar (USD) on Monday. In today’s session, after opening flat, it has been inching up and has moved above the important level of 74. Further appreciation can take the local currency to 73.85 and then possibly to 73.7 – a resistance level. But if INR weakens, it can find support at 74.3. Subsequent support is at 74.5.
The positive trend in the foreign inflows continue for the current month. On Monday, the Foreign Portfolio Investors (FPI) have made net investments of ₹4,738 crore. This has been a positive factor for the local currency and consistent inflows can help the rupee gain against the dollar.
Dollar index
The dollar index witnessed a volatile session yesterday. While it decline in the first half of the session, the index recovered in the latter half and rallied sharply ending the day with a minor gain. It registered an intraday high of 92.8 before ending the session at 92.5. For the past few trading sessions the index has been trading sideways between 92 and 92.75 and unless either of these levels are taken out, the next leg of trend cannot be confirmed.
Trade strategy
The rupee has opened on the front foot and it has rallied above the important level of 74. The price action looks positive and the local currency is likely to advance in today’s session. So, traders can be positive and buy INR with stop-loss at 74.1.
Supports : 74 and 74.3
Resistances : 73.85 and 73.7
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