The rupee (INR) gained marginally yesterday, as it closed at 73.29 versus 73.34 – its previous close. The local currency opened flat today and is hovering at the important level of 73.3. If INR strengthens from the current level, it is likely to face a hurdle at 73.15. A breakout of this level can rally to 73. On the other hand, if the rupee declines, it has a support at 73.5. A breach of this level can drag the domestic currency to 73.7. Below this level, 74 can be the support.
Extending the positive sentiment, the Foreign Portfolio Investors (FPI) bought domestic assets yesterday. The net investments on Wednesday stood at ₹821 crore (equity and debt combined), taking the weekly tally to about ₹2,270 crore. This has been exerting an upward pressure on the Indian currency.
Dollar index
The dollar index was sluggish yesterday and ended the day on a flat note. Today, it has opened flat and is trading around 93.4. The price action since past few trading sessions indicate that the index has been moving in a sideways range between 93 and 93.7. Until it moves out of the range, the next leg of trend will remain uncertain. While 94 can be the resistance above 93.7, the immediate support below 93 is at 92.8.
Trade strategy
The rupee, after opening flat, is hinting at a positive bias. But the local currency need to decisively breach 73.3 in order to rally. Hence, trader can buy INR with tight stop-loss if it breaches 73.3.
Supports: 73.5 and 73.7
Resistances: 73.3 and 73.15