The rupee (INR) opened with a gap-up on Thursday at 73.15 versus preceding close of 73.30 against the dollar (USD). It then moved up to register an intraday high of 73.01. However, INR could not gain beyond since 73 acted as a strong hurdle. Thus, it gave up some of its gains and closed the session at 73.07. This means, the rupee has lost about 2.4 per cent against the dollar in 2020.
Today, the Indian currency has opened at 73.09. If the uptrend can gain enough strength to breakout of 73, it can rally to 72.75 and possibly go up to 72.50. But if INR declines from the current level, it is likely to slip below the support of 73.15. Subsequent support levels are 73.40 and 73.50.
On Thursday, the net investments by the foreign portfolio investors (FPI) stood at ₹1,135 crore (equity and debt combined). Thus, the foreign inflows remain steady and as the market looks bullish, it can be expected to continue in the upcoming session potentially lifting INR against USD.
The dollar index, after registering a low of 89.52 last session, recovered sharply in the second half of the session and closed at 89.94. Thus, it has lost 6.7 per cent in 2020. Despite positive close, the overall trend remains weak. Only a recovery beyond 91 can turn the trend bullish.
The rupee has opened on a flat note today at 73.09. Thus it continues to face the resistance at 73, which is posing a significant challenge for the rupee bulls. On one hand, the trend is in favour of the Indian currency but on the other hand, it faces a strong hurdle at 73 on the back of this INR can face a minor correction. Hence, traders should tread with caution.
-Published on Jan 1th, 2021