The rupee (INR) opened considerably lower on Monday, i.e., at 73.18, versus the preceding session’s close of 73.02, and drifted lower to end the session at 73.25 against the US dollar (USD). Thus, the bears seems to have cemented their position as the local currency stays below the key level of 73.00.
Today, the domestic unit has opened marginally higher at 73.22 and is hovering around 73.15. If it depreciates from here, it can find supports at 73.40 and 73.50. On the other hand, if the rupee goes up, it can face hindrance at 73.15, above which 73.00 can act as a strong resistance.
Despite the domestic equity market closing marginally higher on Monday, it witnessed considerable sell-off intraday. As a result, foreign portfolio investors (FPIs) remained sellers yesterday. The net outflow stood at ₹1,494 crore. If the outflow continues, the rupee could come under pressure.
Dollar index
The dollar index extended the gains yesterday and closed at 92.31, against the previous session’s close of 91.98. Thus, it has breached the resistance at 92 decisively and is likely to head towards 92.65 and then 93.00 as the near-term trend is now bullish. The rising dollar can weigh on the Indian currency.
Trade strategy
The rupee has opened marginally higher and has been inching upwards. It is currently hovering at the resistance level of 73.15. However, the recent price action of the currency pair USD-INR has been a bit bearish and the dollar index is indicating a strengthening dollar.
Supports: 73.40 and 73.50
Resistances: 73.15 and 73.00