The Indian rupee (INR), that began yesterday’s session with gap-down, continued to weaken, ending the day at 73.47 versus the previous close of 73.03, losing 0.6 per cent against the US dollar (USD).
On the back of the support at 73.4 and 73.5, the local currency has opened the day higher at 73.37. If INR appreciates from here, it is likely to face hurdles at 73.15 and 73. But if the downtrend extends below 73.5, it might depreciate to 73.7. Immediately below that level is the support of 73.85.
As the market looked sluggish, Foreign Portfolio Investors (FPI) looked equally split as the inflows and the outflows were almost equal to yesterday’s, i.e. the buy value amounted to ₹5,127 crore and sell value amounted to ₹5,119 crore, effectively keeping the net fund flow almost nil.
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Dollar index
The dollar index was marginally positive yesterday. However, it is struggling to rally above the 21-day moving average and the resistance of 93. The index is likely to stay flat at the current level in the near term. But since the overall trend is bearish, the likelihood of a decline is more. Notably, for the dollar index to establish a sustainable rally, it should break out of the strong resistance of 94.
Trade strategy
The rupee has been trading marginally higher today and is now hovering around 73.35. The price area between 73.4 and 73.5 can be a support band. On the back of this, traders can go long in rupee with stop-loss at 73.5.
Supports: 73.4 and 73.5
Resistances: 73.15 and 73
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