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After opening lower, the rupee (INR) gained against the dollar (USD) yesterday. But there was not much change at close, as it ended yesterday’s session at 70.81 versus its previous close of 70.87. The price action suggests that the rupee is consolidating between 70.7 and 71 and until it moves out of this range, it is not expected to trend.
If the domestic currency breaches the hurdle at 70.7, it will move towards 70.5, a strong resistance. On the other hand, if it weakens and breaks below 71, the immediate support is at 71.2
Dollar index
Unable to move beyond the resistance at 97.5, the dollar index has moderated, and is hovering around the support of the 21-day moving average at 97.2, below which 97 will act as a considerable support. Unless the index breaks either 97 or 97.5, it cannot be expected to trend. Thus, the index might have a muted effect on rupee until then.
Trade strategy
Today, the rupee opened the session at 70.79 against 70.81, its prior close. Since the USDINR exchange rate is oscillating between 70.7 and 71, it is recommended that traders stay on the fence until it breaks either of those levels.
Supports: 71 and 71.2
Resistances: 70.75 and 70.5
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