Technical Analysis

Daily rupee call: Follow range trading strategy

Akhil Nallamuthu BL Research Bureau | Updated on December 04, 2019

After briefly trading above the resistance at 71.6, the rupee closed at 71.68 on Tuesday against the dollar. It registered an intraday high of 71.52. Thus, the Indian currency ended another session within the range between 71.6 and 71.88.

If the domestic currency regains bullish momentum and appreciates above 71.6, it will face hurdle at 71.4; whereas further weakening from current level will find support at 71.88, below which 72 is a strong base.

The dollar continued sliding and the dollar index is currently testing the support at 97.67. The price action looks bearish and it will most probably decline to the minor support at 97.4. Below that level, 97 will be a substantial support. On the other hand, if the index rebounds, it will face hindrance at 98.

In the off-shore currency market, the one-year Non-Deliverable Forward (NDF) points of the USDINR currency pair was little changed at market close despite considerable decline in dollar. It marginally dropped to 297.25 against 299.6 on previous day.

The rupee has opened lower at 71.8 today, against previous close of 71.68. However, it continues to stay within the range. Hence, traders are recommended to follow range trading strategy i.e. if exchange rate reaches 71.88, initiate rupee long with tight a stop-loss; whereas if it touches 71.6, initiate rupee short with a tight stop-loss.

Supports: 71.88 and 72

Resistances: 71.6 and 71.4

Published on December 04, 2019

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