The rupee, on Thursday, weakened and closed at 71.6 after making an intraday low of 71.67 against the dollar (USD). Since it has not closed below the key support at 71.6, the chance of further depreciation is low. Until the domestic currency closes below the support of 71.6, it can be approached with a bullish bias.

On the back of the support, the rupee may advance from current level. On the upside, the resistance is at 71.4 and 71.2. However, if the Indian currency slips below 71.6, it could attract more bears and decline to 71.88 and 72. The dollar remains sluggish and the dollar index is hovering around an important level of 98.25. If it resumes the uptrend, it might advance to 98.5 whereas if it weakens, it will find support at 98.

In the offshore market, the one-year Non-Deliverable Forward (NDF) points of the USDINR currency pair rose to 296.2 from the previous day’s close of 290. It marked an intraday high of 300.5, meaning an increased demand for the dollar in the forward market. If demand persists, it will weigh on the Indian currency.

The rupee has opened today at 71.57 against the dollar versus yesterday’s close of 71.6. But currently, it has slightly declined to 71.65. If the rupee stays below 71.6 and the weakness sustains, it may witness further sell-off from current levels. Hence, traders are advised to tread with caution as the exchange rate of USDINR is at a crucial juncture.

Supports: 71.88 and 72

Resistances: 71.2 and 71.4

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