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Yesterday, the rupee (INR) traded flat against the dollar (USD) and closed at 71.28 versus its previous close of 71.29. The daily chart indicates that 71.3 is a strong support and until the local currency trades above that level, it could be bullish.
On the upside, the rupee has a hurdle at 71.2, and 71.1 is the subsequent resistance. On the other hand, if the domestic currency weakens, 71.3 and 71.4 are the supports spotted near the current levels.
Dollar index
The dollar index witnessed a minor correction yesterday after registering a high of 98.95. Further correction can drag the index towards the support at 98.5; as long as the index remains above that level, the trend will remain bullish. If the index resumes its rally, the nearest hindrance is at 99.15, and 99.5 is the resistance above that level.
Trade strategy
Today, the rupee has opened marginally higher at 71.23 versus yesterday’s close of 71.28. Until the support at 71.3 holds, it can be approached with a bullish bias. Thus, intraday trading can be planned in two ways. Either initiate rupee longs with stop-loss at 71.45 if the exchange rate of USDINR reaches 71.3 or initiate fresh longs with tight stop-loss if rupee breaks out of the resistance of 71.2.
Supports: 71.4 and 71.5
Resistances: 71.2 and 71.1