Daily Rupee call . Initiate rupee long with stop-loss at 72.1

The rupee (INR) gained marginally yesterday where it closed at 71.56 versus its previous close of 71.66 against the dollar (USD). Thus, the Indian currency has closed with a gain for second consecutive day and inched above the resistance at 71.65.

But the rupee has opened lower today and is facing considerable selling pressure as the global market sentiment is weak resulting in demand for safer assets. The domestic currency is currently trading at 71.87, near the support band between 71.88 and 72.

Dollar index

The dollar index has been in a corrective phase since past one week. The index has declined to the current market price of 98.5 after registering one-year high of 99.91 a week ago. Since it has slipped below the 21-day moving average, further correction cannot be ruled out. Supports are spotted at 98 and 97.75. A deeper correction in the dollar index can favourable for rupee.

Trade strategy

Though the Indian currency is witnessing a downward pressure, the price band between 71.88 and 72 is a considerable support. Until the rupee stays above those levels, further decline is less likely. Hence, traders with higher risk appetite can go long in rupee with stop-loss at 72.1

Supports: 71.88 and 72

Resistances: 71.65 and 71.5

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