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BL Research Bureau
On Thursday, the rupee (INR) ended the session with a marginal gain. It closed at 71.76 versus its previous close of 71.81 against the dollar (USD). Even though the exchange rate of USDINR remains within a broad range between 71.6 and 72, the currency pair traded in a tighter range between 71.7 and 71.9 in the past two trading sessions, continuing with its sluggish price action.
There isn’t much volatility in the dollar index too, as it continues to move sideways (mostly trading between 97.65 and 97.9) since the beginning of the week. On a broader view, a trend can emerge only if the index breaches either 97.67 or 98 levels.
In the off-shore currency market, the one-year Non-Deliverable Forward (NDF) points of the USDINR currency pair softened to 305 at the close of yesterday’s market session. For comparison, the NDF points as on the previous day’s end were at 313. Thus, the spread of the forward has dropped for the second consecutive day, indicating reduced demand for the dollar – a favourable condition for the Indian currency.
Today, the rupee has opened flat at 71.75, and there seems to be no clear trend. However, traders with higher risk appetite can initiate rupee longs when the exchange rate moves to 71.9.
Supports: 72 and 72.3
Resistances: 71.4 and 71.6
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