Technical Analysis

Daily rupee call: Initiate rupee shorts with stop-loss at 71

Tunia Anna Cherian_4795 | Updated on January 24, 2020 Published on January 24, 2020

The rupee (INR) declined on Thursday and closed the session at 71.27 versus its previous close of 71.19 against the dollar. Thus, it has breached support at 71.24, which also happens to be the 38.2 per cent Fibonacci retracement level of the previous upswing. This increases the chance for further weakness.

On the downside, the immediate support is 71.4, where the 50 per cent Fibonacci retracement of the previous uptrend lies. Subsequent support is at 71.6. If the local currency appreciates, 71.24 will act as a resistance, above which the resistance is at 71.

Dollar index

The dollar index continues to trade within the range of 97.45 and 97.7. So, unless it moves out of this range, the next leg of trend will be unclear. Since the index has managed to stay above the 50-day moving average at 97.5, the possibility of a break on the upside is higher, which might weigh on the Indian currency.

Trade strategy

Since the rupee has broken below the range between 71 and 71.24, further depreciation is likely. Thus, it is recommended that traders initiate fresh short positions on rallies, with stop-loss at 71.

 

Supports: 71.4 and 71.6

Resistances: 71.24 and 71

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on January 24, 2020
This article is closed for comments.
Please Email the Editor