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The rupee (INR) appreciated on Monday as it closed at 71.05 versus the previous close of 71.2 against the dollar (USD). It is currently facing an important resistance at 71.
If the momentum continues and the local currency advances, it will face a minor resistance at 70.75. Above that level, the resistance is at 70.45. On the other hand, if the domestic currency moderates on the back of resistance, it will find support at 71.2 and 71.4.
The dollar index dropped slightly from the resistance at 97.67. Currently trading at 97.6, the likelihood of the index moving past the resistance at 97.67 is low, a favourable condition for the rupee. A decline from current level will take the index to 97.4, below which it can be dragged to 97. On the upside, above 97.67, the resistance is at 98.
Today, the domestic currency has opened on a positive at 70.97 and is currently trading at 71.04 against the dollar. The momentum is favourable for the rupee and dollar is trading at a resistance, and so one can continue to hold bullish view on rupee. But since 71 is a key resistance, the rupee might soften a little before extending its gain. Hence, traders are advised to wait for a pullback and initiate fresh rupee longs with a tight stop-loss.
Supports: 71.2 and 71.4
Resistances: 71 and 70.75
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