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BL Research Bureau
After making an intraday high of 71.11, the rupee (INR) ended the session at 71.19 versus its previous close of 71.12 against the dollar (USD). Thus, the local currency remains with a bearish bias.
The rupee closed yesterday’s session just above the support at 71.2. If it breaks below that level, the immediate support is at 71.4, an important level. However, if the domestic currency responds to the support and starts gaining, 71 will act as a strong resistance. So, the key levels to be watched for are 71 and 71.4.
The recent rally in the dollar was unable to take the dollar index beyond the resistance at 97.4. After testing the resistance in yesterday’s session, the index moderated to the current level of 97.3. If dollar regains traction and breaches 97.4, it can be expected to rise to 97.67. In contrast, a decline from the current level will drag the index towards the support at 97.
Trade strategy:
Though the rupee is trading with a negative bias, it is hovering around 71.2, i.e. between the two key levels of 71 and 71.4. Hence, from a trading perspective, it can be approached in two ways.
Either initiate rupee longs if the exchange rate of USDINR first reaches 71.4 with stop loss at 71.55, or initiate rupee shorts if the exchange rate of USDINR first reaches 71, with stop loss at 70.8.
Supports: 71.4 and 71.6
Resistances: 71 and 70.85
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