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The rupee after testing a key resistance on Friday could not appreciate further against the dollar but managed to end the session marginally higher at 71.14. The rupee has now gained for four consecutive trading sessions, building a bullish momentum.
The Indian currency might face some downward pressure, as 71 is a stiff resistance.
If the domestic currency manages to break the resistance at 71, the buying interest is expected to increase substantially, making the currency appreciate towards 70.35.
On the other hand, if rupee faces a selling pressure as it treads near resistance, it could decline to 71.4.
The dollar faced a considerable selling pressure over the past week. The dollar index is currently hovering around a key support of 97. If selling momentum continues, it could weaken to 96.4; whereas a recovery from current level could see it rise to 98.
There is optimism surrounding the trade talks between the US and China which works in favour of the emerging market currencies, but traders should brace themselves for a volatile session, as British parliament votes on the withdrawal agreement today.
From a trading perspective, wait and initiate rupee longs only if it breaks above the resistance at 71.
Supports: 71.4 and 71.6
Resistances: 71 and 70.35
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