BL Research Bureau
The rupee (INR), which closed below the critical support of 76 for two consecutive days, is on the back foot against the dollar (USD). Today, INR has opened at 76.15, retaining the bearish bias. The domestic currency can be under pressure until it remains below 76.
The further decline can drag the local currency towards the immediate support at 76.3. Subsequent support is at 76.5. On the other hand, if the rupee strengthens and manages to rally above 76, it can face a hurdle at 75.8. Resistance above that level is at 75.6.
Compared to the first two days of the week, the amount of selling by the Foreign Portfolio Investors (FPI) on Wednesday was lower. The net outflow was about ₹486 crore (equity and debt combined). With that, the tally for the week has gone up to about ₹4,926 crore. This has weighed on the Indian currency, which is now facing constant downward pressure.
Dollar index
The dollar index was sluggish yesterday as it was hovering around the important level of 97. It has been attempting to rally since last week, but 97 is acting as a hindrance. A breakout of this level can take the index higher towards its nearest resistance at 97.75, where 21-day moving average coincides. However, if the dollar goes out of favour, the index might moderate to 96.25 and 96.
Trade strategy
The rupee remains below the support of 76, and it can be bearish until it stays below that level. Hence, for intraday, traders can initiate new rupee short positions with a tight stop-loss.
Supports: 76.3 and 76.5
Resistances: 76 and 75.8
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