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Continuing with the bullish momentum, the rupee (INR) gained against the dollar (USD) on Thursday. Compared to the previous day’s close of 71.7, the domestic currency closed at 71.21 yesterday. Thus, it has closed above the important level of 71.4. But the one-year forward spread of the USDINR currency pair remains unchanged at 302 points.
While 71.2 can act as a resistance, the Indian currency will most likely extend the gain today. But 71 can act as a considerable hindrance. On the other hand, if rupee weakens, it has a support at 71.4.
Dollar index:
The dollar index rallied, and it seem to be heading towards the resistance at 97.75, which will be a significant hurdle. A breakout of that level can attract more buying, potentially taking the index to 98.4. Noticeably, 98 may act as a minor resistance. In case if the index starts to decline, the nearest support is at 97.2
Trade strategy:
Despite a rally in the dollar index, the rupee continues to strengthen. The price action indicates a good bullish momentum and as long as the domestic currency remains above 71.4, one can continue to take bullish view. For intraday, traders can initiate rupee longs on dips with stop-loss at 71.5
Supports: 71.4 and 71.6
Resistances: 71 and 70.75
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