The rupee (INR) has opened today’s session with a gap-up at 75.85 versus Monday’s close of 76.02. It has moved above the resistance of 76 – a bullish indication. If the rupee can sustain above this level, it might see a fresh round of rally.
While it has rallied past the resistance at 76, the nearest roadblock for the bulls can be 75.8. Above this level, it can advance to 75.6. But if the local currency give up the gains and slip below 76, it is likely to decline to 76.3 – a support level for INR. Subsequent support is at 76.5.
Yesterday, the Foreign Portfolio Investors (FPI) bought domestic assets as the market sentiment was positive. Though the amount is not very significant, the FPIs were net buyers yesterday where the net inflow stood at ₹424 crore (debt and equity combined). If Monday’s positive bias is carried over today, INR has good chance to gain against USD.
Dollar index:
The dollar index after gaining in the past four trading sessions, witnessed a fall yesterday. After facing the resistance at 97.75, it declined and posted a loss of three fourth of a per cent yesterday. Notably, the trend remains downward and until the index stays below 97.75, it can be bearish. If the dollar faces downward pressure, it can be positive for the Indian currency.
The rupee has moved above the resistance at 76 and the dollar index signals a possible weakness in dollar, implying a favourable condition for INR. However, now hovering around 75.85, the rupee faces a resistance at 75.8. Considering this, traders can buy INR with stop-loss at 76 if it breaks out of 75.8
Supports: 76 and 76.3
Resistances: 75.8 and 75.6