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After appreciating marginally in the past week, the Indian rupee (INR) closed at 72.8 against the US dollar (USD). It continues to test a key resistance in the band between 72.8 and 73.0. Today, the currency started the session on a flat note, opening at 72.81 and turning weak. It is trading in a sideways band between 72.8 and 72.95. A rally above the key barrier at 72.8 can take the rupee higher to 72.75 and then to 72.65. However, a fall below the base level of 72.95 or 73 can pull the local currency down to 73.11 and then to 73.2 levels in the near term.
Also read: Dollar retreats as euro recovers
Dollar index
The dollar index had fallen 0.5 per cent to 91.0 in the past week after recording an intraweek high of 91.6. But it is showing some positive signs in today’s session after opening at 91, and has gained marginally to 91.11. The key base at 91 is cushioning the index. A rally above 91.3 can take the index higher to 91.5 and then to 91.6. On the downside, if the index slumps below 91, it could go down to 90.8 and then to 90.65.
Trade strategy
The rupee is range-bound once again in the band between 72.8 and 72.95. A strong rally in the dollar index can put pressure on the local currency and weaken it to 72.95 or to 73. However, a break of the key resistance at 72.8 can take the rupee higher to 72.75 or to 72.65. In such a scenario, traders can go long with fixed stop-loss.
Supports: 72.95 and 73.00
Resistances: 72.8 and 72.70
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