Technical Analysis

Daily Rupee call: Initiate long above 71.6

Akhil Nallamuthu BL Research Bureau | Updated on December 03, 2019 Published on December 03, 2019

On Monday, the rupee (INR) strengthened marginally as it closed the session at 71.66 versus its previous day close of 71.73 against the dollar (USD). Thus, the Indian currency ended the session within the range between 71.6 and 71.8.

Also read: Rupee rises against US dollar in early trade

If rupee moves beyond 71.6, it will most likely appreciate to the immediate hurdle at 71.4; whereas, if it weakens from current level, it may depreciate to 71.88.

Yesterday, the dollar declined sharply and as a result, the dollar index has breached the key support at 98. It also slipped below both 21- and 50-DMAs, which coincides at 98. Thus, the fall seems to be significant and there might be further weakening in the dollar. Currently trading at 97.87, the immediate support is at 97.67. Below that level, 97.4 will act as a minor support. On the upside, 98 will now be a stiff resistance.

The weakness in the dollar will be positive for the domestic currency. However, it faces a strong resistance at 71.6. Hence, traders are advised to initiate rupee longs only if the rupee decisively breaks out of 71.6 with a tight stop-loss.

Supports: 71.88 and 72

Resistances: 71.6 and 71.4

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Published on December 03, 2019
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