BL Research Bureau

The rupee (INR) has started the session on a positive note against the dollar (USD), opening at 72.87 to the previous close of 72.96 levels. It is trading in the range of 72.85 and 72.89 in today's session. The resistance level of 72.8 continues to limit the upside in the local currency. We reaffirm that a strong rally above this barrier can take the rupee upwards to 72.75 and then 72.65 shortly. Conversely, if the support level of 73 is breached on the downside, then the rupee can weaken and drag it lower to 73.11 initially and then to 73.2 levels in the near term. Over the last one week, the rupee has been broadly trading in the band between 72.8 and 73.0 levels. From a medium-term perspective, these levels are key.

Dollar index

The dollar index had recently encountered a key resistance at 91.6 and started to decline, resuming the downtrend that has been in place since September 2020 high of 94.7 levels. Following a flat open at 90.91 in today's session, the index has slipped 0.2 per cent so far and trades at 90.7 levels. A key base at 90.65 can cushion the index temporarily. But a plunge below this base can pull the index down to 90.4 and then to 90.2 levels. Key resistances are at 91 and 9.5.

Trade strategy

With the weakness in the dollar index, the rupee is showing minor positive bias. So, the rupee can trade with a positive bias and can gain in the near term. We reaffirm that a rally past 72.8 can push the currency upwards to 72.75 or 72.65 levels. Traders can go long above 72.8 levels with a fixed stop-loss. Key supports are at 73 and 73.11.

Supports: 72.95 and 73.00

Resistances : 72.80 and 72.70

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