Keep in mind that Monday was Juneteenth in the United States, and therefore liquidity may have been a bit of an issue.
- The USD/INR initially tried to rally a bit during the session on Monday but gave back gains as we are sitting just above a major trendline against the Indian rupee.
- Because of this, it looks as if the market is trying to sort itself out, and it looks also at this point that the 50-Day EMA above is worth paying close attention to as well, right at the ₹82 levels.
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The 200-Day EMA is sitting just below a major uptrend line, and therefore it looks like we are looking at this chart through the prism of a potential ascending triangle, and if we were to break out above the ₹83 level, then it opens up a much bigger move. It’s also worth considering that the 200-Day EMA has been important multiple times, and a lot of technical traders will be paying very close attention to it. As long as we stay above there, then it’s likely that we will see buyers in this market trying to take advantage of “cheap US dollars.” That being said, you can also see the exact opposite of the indicator being influential, meaning that if we were to break down below the 200-Day EMA, then we probably see the US dollar falling against the rupee, and perhaps we could drop down to the ₹80 levels.
All things being equal, the market continues to see a lot of noisy behavior, and if we can break above the high of the last 2 candlesticks, then it opens up the possibility of a move to the 50-Day EMA, and therefore we break above there, it’s likely that we could go look into the ₹83 level and test the top of that triangle. All things being equal, this is a market that I think continues to see a lot of noisy behavior, which is typical for this pair as it is very choppy.
Keep in mind that Monday was Juneteenth in the United States, and therefore liquidity may have been a bit of an issue. However, it’s also worth noting that this is a rather exotic currency pair, so it has a huge amount of influence on it from external factors like risk appetite. If we see risk appetite start to disappear, that will send the US dollar higher, and of course vice versa.
Potential Signal: I would go long USD/INR at ₹82.15, with a stop loss at ₹81.70. My target is ₹82.50 where I would take partial profit and look to get out just underneath the ₹83 level.
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