USD/INR Technicals – Bungling Over The 62.5 Level

USD/INR Technicals – Bungling Over The 62.5 Level

Time Table

Rupee continued weakness, with USD / INR continuing to trade higher in the ascending channel that started last Friday night. The slight rally can be attributed to the slight increase in the strength of USD coupled with the inherent weakness of the rupee which resulted from the recent rate hike enigmatic RBI.

From the technical point of view, the upward channel has deleted the key resistance 62.50. This increases the likelihood of price rebound higher from the level mentioned above, with a goal of up to Top Channel. In theory, we might be able to see some upward acceleration that could even break up and Canal Top Swing same yesterday. However, the price action has been rather silent since last Friday, and we did not observe a semblance of strong upward thrust from, but little movement of minutes. Therefore, it is difficult to imagine the price being able to do this time, although the bullish break above 62.5 was "confirmed".

Looking Fundamentals, USD will continue to strengthen in the coming months or perhaps years that the Fed should shrink and eventually ends QE. On the other hand, rupee will remain under pressure due to the huge current account deficit the government is running, coupled with low inflation and lowering of growth forecasts. Therefore, long-term USD / INR uptrend is not unreasonable.

That being said, it is interesting to see that the USD / INR bulls remaining silent despite USD strengthening past two days which saw AUD / USD and GBP / USD gains given their entire post FOMC. Perhaps the rise in rates implemented by RBI on Friday is to have a slight impact, keeping the bulls mainly in the control and prevention of a rout Rupee. However, it is likely that RBI will implement accommodative measures that may affect the economy, and as the surprise tightening measures failed to prevent USD / INR to climb completely all forms of accommodative policy can cause a reaction USD bullish extreme /INR.

links:
GBP / USD - continues to count on the support at 1.60
AUD / USD - One week Low drifts below 0.94
EUR / USD - continues to drift slowly lower below 1.35

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