USD/INR – Continuing Lower but Long-Term Uptrend Remains

Hourly Chart


Rupee continues to strengthen, pushing USD/INR lower from around 66.75 thereabouts to a low of 66.08 within the first few hours of trading. This continues the downtrend that started last week following RBI’s new initiative to sell USD from its reserves to the 3 largest oil corporations in India. Despite doubting the efficacy previously, USD/INR did manage to break the 161.8% Fib Extension convincingly last Friday, sending price below the soft support of 67.0 as well. This break of 67.0 is further affirmed by the subsequent pullback during early US trading session. The pullback was rebuffed by the confluence of 67.0 confluence with the descending trendline representing the decline from last week’s peak, signalling that bearish pressure remain strong.

It is the same pressure that pushed price lower today, with added push coming from the decline of USD due to the lower likelihood of war in Syria. By virtue of trading below last Friday’s low, we are currently in a bearish extension leg which should bring us to the next support level of possibly around 65.7, which is not that far from here admittedly. Then again, Stochastic readings are hitting Oversold region already, and hence suggesting that it may be harder for price to push lower further especially given that fundamental reasons for a strong Rupee still remains extremely dubious; RBI’s recent policy introduction remains a short-term liquidity tightening measure and not the silver bullet the economy needs.

Hence, traders should not expect USD/INR to continue pushing lower for long, and the eventual bullish pullback/correction may be stronger than the decline that we’ve seen thus far. However, should RBI does manage to implement some sort of a stimulus plan, we could see Rupee trading back strongly once again. This may be reflected in technicals via price trading back within the Channel seen in the Daily Chart (below).

Daily Chart


More Links:
GBP/USD – Rallying Off Support at 1.55
AUD/USD – Relying Heavily on Support at 0.89
EUR/USD – Placing Significant Pressure on Support at 1.32

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu