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The rupee (INR) on Thursday witnessed considerable volatility against the dollar (USD). The domestic currency, after weakening in the first half of the session, rallied in the latter half and recouped its intraday loss. On close-to-close basis, the rupee stayed flat where it closed at 71.31 versus its previous close of 71.33.
If the buying momentum continues, the rupee can advance to 71.2 today. Above that level, the resistance is at 71.1. On the other hand, if the local currency faces downward pressure, 71.4 will act as a good support. Subsequent support is at 71.5.
Dollar index
The dollar index continues its strong rally and could most likely appreciate to 99.5. Notably, 99.67 is the 52-week high. Above that level, the index can rally to the psychological level of 100. But if the index witnesses a correction, the support levels are spotted at 98.7 and 98.5.
Trade strategy
The rupee is currently trading at 71.32, between two key levels 71.2 and 71.4. From the risk-reward perspective, new positions are not recommended at this level. Traders can either buy rupee with a tight stop-loss if the exchange rate moves to 71.4, or short rupee with a tight stop-loss if the exchange rate moves to 71.2. Stay on the sidelines until then.
Supports: 71.4 and 71.5
Resistances: 71.2 and 71.1
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