The market sentiment improved, aiding the rupee (INR) gain against the dollar (USD) on Wednesday. Facing downward pressure in the initial hours of the session, the Indian currency marked an intraday low of 72.07. However, it started to gain sharply as 72 is a solid support and continued to advance throughout the session, closing at 71.7.

Further appreciation from current levels can take the exchange rate to 71.2 and 71 whereas if the rupee declines on the back of resistance, 71.6 and 71.88 are the support levels.

Dollar index:

The dollar gained yesterday and hence the dollar index appreciated and closed at 97.3, above the key resistance at 97. Also, the index has moved past the 21-day moving average at 97.2. Thus, index is likely to appreciate where it will face the immediate resistance at 97.75. On the downside, the range between 97 and 97.2 could act as a support.

Trade strategy:

Today, rupee has begun the session strongly at 71.41 against yesterday’s close of 71.7. However, one should be cautious about the resistance at 71.4, which may hold the rupee back from further appreciation. Also, the dollar might appreciate as indicated by the dollar index, which can weigh on the domestic currency. Hence, from the perspective of trading, one can approach the currency pair in two ways. Initiate fresh rupee longs with tight stop-loss if it decisively breaks above 71.4 or wait for a correction and buy rupee at 71.7 with 72 as stop-loss.

Supports: 71.6 and 71.88

Resistances: 71.4 and 71.2

Related Topics
comment COMMENT NOW