Daily Rupee call . Buy rupee on dips with stop-loss at 72.1

The overall market sentiment inclining to safer assets is weighing on emerging market currencies and the Indian rupee (INR) is no exception. The local currency weakened yesterday and closed at the critical level of 72 versus its previous close of 71.66 against the dollar (USD), losing nearly half a per cent in one trading session.

While 72 is a strong support, a break below that could intensify the sell-off where the exchange rate could move to 72.2. Below that level, the support is at 72.4. But if rupee manages to reverse the trend, 71.77 can act as a minor resistance. A breakout of that level can take rupee to 71.65.

Dollar index

The dollar index, that gained in the first half of the session, faced a considerable downward pressure and declined in the latter half. However, the overall trend remains bullish. Currently the index is hovering near the minor support of 99.2. Further correction can take the index towards the support at 98.7. But if the index regains traction, it can rise to the crucial level of 100.

Trade strategy

Rupee has opened today on a front foot at 71.84 against its previous close of 72. Until the domestic currency trades above 72, chance of a recovery is more. So, for intraday trading, one can buy rupee on dips with stop-loss at 72.1

Supports: 71.88 and 72

Resistances: 71.65 and 71.5

COMMENT NOW