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BL Research Bureau
The rupee (INR) closed at 71 on Monday versus its previous close of 70.81 against the dollar (USD). The local currency has been facing downward pressure for the past couple of trading sessions. It is currently testing the vital level of 71.
If the domestic currency breaks below 71, there might be a change in the short term trend, where the rupee might depreciate to 71.2. But if it gains on the back of the support, it might rise to 70.75, above which the resistance is at 70.5.
The dollar index continues to trend with a negative bias as it trades below 97. Currently trading at 96.64, it seems to be heading lower to the support band between 96.35 and 96.5. Below those level, the index could test the support at 96. On the upside, 97 is a substantial hurdle.
Trade strategy:
Today, the rupee has opened marginally higher at 70.91 against its previous close of 71. Though the domestic currency has been trading with a negative bias, until the support at 71 holds, bulls have a much chance of regaining momentum. Also, the risk-reward ratio from the current level is favourable for rupee long positions. Hence, traders can buy rupee for intraday. Place a tight stop loss as a break below 71 might attract more rupee shorts.
Supports: 71 and 71.2
Resistances: 70.75 and 70.5
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