The rupee trimmed its gain on Thursday, as it closed the day lower by 0.16 per cent at 71.02 against the dollar. The demand for dollar dampened the Indian currency. This comes after the rupee closed positive for six consecutive trading sessions.

Thus, the rupee has slipped below the important level of 71 and further weakness could take it lower towards 71.2 and 71.4; whereas if bulls regain control, and move the rupee past 71, it can appreciate to 70.75 and 70.35.

The dollar rallied yesterday and as a result of the dollar index breaching the resistance at 97.35. However, it could not extend the buying momentum and is moving sluggish. Notably, there is a minor resistance at 97.5. A break above that level could take the index to 97.75 but a decline might pull it down to 97.

Technically, as long as 71.2 holds, one can continue to have bullish bias on the rupee and price correction can be used as an intraday buying opportunity. Hence, traders can go long in rupee for targets at 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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