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BL Research Bureau
The rupee (INR) closed lower on Wednesday at 71.81 compared to its previous close of 71.71 against the dollar (USD). The Indian currency is consolidating within a range between 71.6 and 72. Though the bias remains bullish as long as it stays above 72, only a breakout of the resistance at 71.6 can establish an uptrend.
The dollar index (value of the US dollar against a basket of major currencies), after appreciating to 97.93 yesterday, gave up its gains and is currently trading at 97.78. The immediate support is at 97.67 whereas on the upside the index can move towards 98.
When the dollar advanced yesterday, the one-year Non-Deliverable Forward (NDF) points of the USDINR currency pair spiked to 334 points. However; then it dropped to 313 points at the close of yesterday’s market session. Unless there is a sustainable increase in NDF points, the dollar is not expected to rise against the domestic currency.
In today’s session, the rupee opened at 71.83. Until the exchange rate of USDINR moves out of the range between 71.6 and 72 traders can adopt a range trading strategy. Thus, if the rupee moves to the support at 72, initiate rupee long position with a tight stop-loss; whereas if the rupee moves to the resistance at 71.6, initiate rupee short position with a tight stop-loss.
Supports: 72 and 72.3
Resistances: 71.4 and 71.6
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