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USD/INR Forecast: Shoots Towards Highs

Pullbacks at this point in time should continue to offer value, and the 50-Day EMA should be short-term support. 

  • The USD/INR rallied during the trading session on Friday, initially pulling back to the 50-Day EMA before turning around and rallying quite significantly.
  •  As things stand right now, it looks like we are going to threaten the ₹82.50 level, and then after that the ₹83 level, an area that has been significant resistance.
  • That being said, it probably does not take too much in the way of imagination to see that the market might be forming a bit of an ascending triangle, so breaking above the ₹83 level could really get this thing going.

Pullbacks at this point in time should continue to offer value, and the 50-Day EMA should be short-term support. Underneath there, we have the ₹81 level, which obviously causes a lot of support based on the balance that we have seen there. Beyond that, we also have a lot of interest in that area mainly due to the fact that it is between the 50-Day EMA and the 200-Day EMA indicators. In other words, there’s a lot supporting this market and the moves that we have seen in the Forex markets when it comes to the US dollar during the day certainly give us more potential momentum to the outside as well.

Markets Will Continue to See Plenty of Volatility

The market participants will continue to see a lot of volatility, but quite frankly in this environment with the Federal Reserve seemingly stuck in a tightening move and of course a lot of concerns around the world about tightening monetary policy, it does make sense that emerging market currencies get hammered as a result. If that’s going to be the case, then I think you get a situation where buyers on dips will continue to return.

If we were to break down below the 200-Day EMA then the market could drop rather significantly, perhaps down to the ₹78.50 level underneath, an area that’s been both supportive and resistant in the past and of course has a certain amount of market memory attached to it. With that, I think anything below the 200-Day EMA since the market to that level, anything below that level kicks off a major downtrend but with the way the US dollars performing, that seems to be very unlikely at this point in time, especially against emerging markets.


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