The rupee on Wednesday opened marginally weaker, but it gained during the course of the day, closing above the resistance of 71 against the dollar for second successive trading session. This is a positive indication and the domestic currency can be expected to further appreciate from current level.
The level of 71 will now turn in to a support. If the rupee continues appreciating, next targets are 70.75 and then 70.35. If rupee begins slipping, support beyond 71 is at 71.2.
Maharashtra and Haryana Assembly election results are set to be announced today and it might trigger some volatility. Hence, intraday traders must exercise caution.
Crude oil data released by US Energy Information Administration (EIA) showed that the inventories reduced by more than expected, pushing up the oil prices. This might have an effect of dampening the rupee as crude is a major import component for India.
The dollar looks sluggish, which is visible in the dollar index. It is moving within a range between 97 and 97.35, which could be a supporting factor for the Indian currency in the near term.
Traders can take long positions for intraday targets of 70.75 and 70.35 with support at 71.2.
Supports: 71.2 and 71.4
Resistances: 70.75 and 70.35
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