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The rupee (INR) appreciated against the dollar (USD) on Monday, after opening considerably lower. The Indian currency took support at 71.6 to stage a rally. It closed the session at 71.36. The rupee, thus, remains within the range between 71.2 and 71.6.
While the domestic currency fluctuates within the range, the next leg of trend cannot be confirmed. The resistance above 71.2 is at 71, whereas the immediate support below 71.6 can be spotted at 71.85.
Dollar index
The dollar rebounded from the 50-day moving average yesterday, after declining in the previous two trading sessions. Currently trading at 97.83, it will face a hurdle at 98.
If the index breaches that level, the next resistance is at 98.45. On the downside, the nearest support is at 97.5, below which there is a support band between 97 and 97.15.
Trade strategy
The local currency opened Tuesday's session on the front foot at 71.24 versus yesterday’s close of 71.36. The rupee has been gaining momentum and will most likely rally from current levels. But it is hovering around a key resistance at 71.2. Thus, traders are advised to go long in rupee with stop-loss at 71.4, if it breaks out of the resistance at 71.2.
Supports: 71.6 and 71.85
Resistances: 71.2 and 71
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