USD/INR Analysis
Morning Update: Will the USD/INR pair continue to increase or decrease from its present level of 83.10 ?
In recent days, the USD/INR has traded sideways within the range, breaking below the resistance zone of 83.50 that we previously identified in our study. For the past few weeks, the USD/INR exchange rate has fluctuated between 83.00 and 83.50, but last week it dipped below the 83.00 level and rebounded strongly. Using the USD/INR chart and the January monthly options data, we can determine whether the trend will continue to decline or increase:
- For the past few weeks, the USD/INR has traded sideways between 83.00 and 83.50.
- The chart shows a strong support zone of 82.70-82.80, and there may be significant demand for USD/INR near the 200 DMA, which is in the 82.70 range.
- The January monthly option chain for USD/INR also shows substantial put writing near the 83.00 strike, implying a sharp rise in the USD/INR pair to 83.50 levels.
Please carefully review the preceding chart to gain a better understanding of the USD/INR price movement. For weeks, the USD/INR exchange rate has fluctuated between 83.00 and 83.50. Last week, it crashed and closed below this level. The USD/INR broke through the 83.00 mark last week and closed below it after October, indicating that the pair is nearing the conclusion of its long distribution period. However, the 200 DMA, which is near 82.70, indicated strong demand, and buyers drove the price beyond the 82.70-82.80 range, as suggested by the USD/INR January monthly option chain.
Let's now look at and understand the USD/INR January monthly options chain:
The option chain shown in the table above shows substantial put writing at 83 strikes, and despite the fact that the price has fallen below the 83.00 zone in the spot market, the writers have not given up, indicating that purchasers drove the price over the 83.00 line. The option chain shows that the USD/INR could restart its strong upward trend and recover to the 83.50 spot zone.
The Dollar-Rupee pair (USD/INR) has been consolidating for several months in the range of 83.00 to 83.50, as seen by the chart and option chain above. It appears that the consolidation will continue. The Reserve Bank of India's (RBI) measures have kept the USD/INR exchange rate relatively stable despite the dollar index's significant volatility.
The USD/INR is likely to increase further, maybe to 82.80-83.50. This predicts a 70-paisa range within which the USD/INR could meander in the next weeks before creating a new range. Currently, the decrease appears to be ideal for purchasing USD/INR because the 82.70-82.80 area serves as a solid support zone. Traders can look for purchasing opportunities in the USD/INR pairing. Traders utilize the risk/reward ratio to manage their capital and potential loss. The ratio is important for determining a trade's risk and projected return. In general, greater risk leads to higher expected returns. Anything higher than 1:2 indicates an appropriate risk-reward ratio.
Consider the levels of support and resistance on the USD/INR daily chart. Each level is indicated on the spot chart.
|
USD/INR |
Support |
Resistance |
|
Level 1 |
82.70 |
83.40 |
|
Level 2 |
82.50 |
83.50 |