USD/INR Analysis
Morning Update: Will the USD/INR pair continue to advance, or will it reach the 200-day moving average?
In recent days, the USD/INR has traded sideways within its range, dropping below our previously identified resistance level of 83.50. The USD/INR exchange rate has fluctuated between 83.00 and 83.50 during the last three weeks, dropping below 83.00 last month before recovering. Using the USD/INR chart and the February monthly options data, we can forecast whether the trend will continue to decline or rise:
- For the past three 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 USD/INR may see significant demand near the 200 moving average, which is also located between 82.70 and 82.80.
- The USD/INR monthly option chain for February shows substantial put writing near the 83.00 strike, implying that the pair will soon exceed 83.50.
Please carefully review the preceding chart to better comprehend the USD/INR price movement. For weeks, the USD/INR exchange rate has been between 83.00 and 83.50. Last month, the price fell and closed below the 83 level. The USD/INR fell below 83.00 last month, indicating that the pair is nearing the conclusion of its long-term volatility. However, the 200 EMA, which is close to 82.70, saw substantial demand, and buyers pushed the price over the 82.70-82.80 range anticipated by the USD/INR February monthly option chain.
Let's examine and analyze the USD/INR February monthly option chain.
The option chain in the table above shows a lot of put writing at the 83 strike, and even if the price has fallen below the 83.00 level in the spot market, the writers haven't given up, implying that purchasers have pulled the price over the 83.00 level. The option chain shows that the USD/INR pair may restart its strong upward trend and recover to the 83.50 spot level.
The Dollar-Rupee pair (USD/INR) has been consolidating for several months in the 83.00 to 83.50 area, as shown in the chart and option chain above. It appears that consolidation will continue. Despite the dollar index's volatility, RBI policies have maintained the USD/INR exchange rate relatively constant.
The USD/INR pair is expected to stabilize further, reaching 82.80-83.50. The USD/INR is expected to move within a 70-paisa range in the next weeks before settling into a new range. Currently, the dip appears to be beneficial for buying USD/INR because the 82.70-82.80 zone provides strong support. Traders may look for buying opportunities in the USD/INR pair. Traders use the risk-reward ratio to balance gains and potential losses. The ratio is useful for calculating a trade's risk and expected return. In general, increasing risk leads to higher expected rewards. Anything more than 1:2 is regarded as an outstanding risk-reward ratio.
Examine the levels of support and resistance on the daily USD/INR chart. Each level is shown on the spot chart.
|
USD/INR |
Support |
Resistance |
|
Level 1 |
82.70 |
83.40 |
|
Level 2 |
82.50 |
83.50 |