USD/INR Technicals – Pushing Lower On USD Weakness

USD/INR Technicals – Pushing Lower On USD Weakness

Weekly Chart

The USD slide last week has greatly benefited from the battered rupee, and perhaps again saved Rupee to new lows. The prices were threatening to escape the Top Channel that would have seen accelerating to 70.0 in the coming weeks, but we stopped short by a weak USD from speculators believe the Fed explores a tapered event December. Whether this is true is debatable, that the market earned their belief so-called "pacifist" declarations of Janet Yellen. But the fact remains -. USD / INR pushes down and threatening to break the channel rising again

If Top Channel be violated, the consolidation area ceiling beneath will be the obvious downside target. It is possible that prices may find some support there, or maybe just a support under the ceiling similar to what happened in mid October. Indeed, the stochastic readings suggest that the bearish momentum is likely oversold when this happens, and whereas the general trend is more oriented all the way since August 2013, there are always technical trend for bulls to recover. When we add to this the economic fundamentals continue to favor a lower INR, the risk of a sudden and unexpected bounce becomes even higher.

Time Table

short-term pressure continues to favor INR at the moment, partly because of the risk on appetite which led Sensex 1.68% higher at the moment. However, the scenario can change quickly with the support face price of 62.5 round figure which is confluence November 8 Swing Low. Stochastic readings also approaching oversold territory with tapered flat curve Stoch. Therefore, even if 62.5 is broken, it is likely that prices may find support from the descending trend line and higher bounce.

But there could be more graces saving for USD / INR this week. If US operators maintain their hyper-sensitivity to cone QE speculation, we have many opportunities for further USD weakness that can send prices lower. US NAHB index of housing prices, Advance retail sales and perhaps even the CPI numbers can cause huge reactions this week, even though such news would have been considered "low" in the past. If all the numbers come lower than expected, it is likely that USD will push down even faster, resulting in a lower USD / INR can bring us back to 61.3 again.

However astute traders realize that it will not be able to change the long-term dynamics, where Rupee remains inherently weak due to poor fundamentals. Case in point, when USD weakened back in August and late September due to stop US Governmental / Debt Crisis ceiling, USD / INR did not fall down, but ultimately rise again. Therefore, do not bet that just because the volatility of short-term news can sink USD / INR, prices will be able to remove a long-term bearish reversal without RBI do something radical to change the fortunes of India.

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

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