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The rupee (INR), after gaining during the first hour of the trading session, faced a substantial selling pressure against the dollar (USD). After marking an intraday high of 70.87, the local currency declined sharply to make an intraday low of 71.2, before closing the session at 71.04. Thus, the exchange rate continues to move around the key level of 71.
The selling pressure is evident as we can observe in the price action. Adding to it, the rupee has closed below 71.04, a bearish indication. Thus, there is a considerable chance of the rupee depreciating further. On the downside, support levels are at 71.2 and 71.4. On the other hand, if the local currency gains, resistance levels are at 70.75 and 70.5.
The dollar index, after making an intraday low of 96.8 yesterday, rebounded and is currently testing the important resistance at 97. If the index moves above that level, it can rise to 97.4; but if it weakens, support is at 96.5.
Trade strategy:
The rupee has been trading with a bearish bias for the past few sessions. Today, it has opened lower at 71.13 against yesterday’s close of 71.04. Below 71, the local currency may attract more bears. From a trading perspective, one can take a bearish view for intraday and short rupee on rallies with 70.85 as stop loss.
Supports: 71.2 and 71.4
Resistances: 70.85 and 70.75
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