USD/INR Analysis
Morning Update: Will the USD/INR pair continue to rise, or will it hit the 200-day moving average?
In recent days, the USD/INR has traded sideways within its range, falling below our previously indicated resistance level of 83. 50. The USD/INR exchange rate has swung between 83.00 and 83.50 during the last three weeks, falling below 83.00 last month before recovering. Using the USD/INR chart and the March monthly options data, we can predict whether the trend will continue to fall or rise:
- For the previous few weeks, the USD/INR has been trading sideways between 83.00 and 83.50.
- The chart shows a strong support zone of 82.70-82.80, and USD/INR could see considerable demand near the 200-day moving average, which is also between 82.70 and 82.80.
- The USD/INR monthly option chain for March indicates significant put writing near the 83.00 strike, indicating that the pair will shortly surpass 83.50.
Please carefully analyze the preceding chart to better understand the USD/INR price movement. For weeks, the USD/INR exchange rate has been between 83.00 and 83.50. Last month, the price dropped and closed below the 83 level. The USD/INR dipped below 83.00 last month, signaling that the pair is nearing the end of its long-term instability. However, the 200 EMA, which is close to 82.70, witnessed significant demand, and buyers drove the price over the 82.70-82.80 range predicted by the USD/INR March monthly option chain.
Let's look at and analyze the March USD/INR monthly option chain.
The option chain in the table above indicates 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, signaling that buyers have pushed the price over the 83.00 level. The option chain indicates that the USD/INR pair may resume its strong rising trend and return 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 range, as indicated in the chart and option chain above. It appears that the consolidation will continue. Despite the dollar index's volatility, RBI policies have kept the USD/INR exchange rate reasonably stable.
The USD/INR pair is likely to consolidate further, reaching 82.80-83.50. The USD/INR is projected to fluctuate within a 70-paisa range in the next weeks before settling into a new range. Currently, the dip appears to be advantageous for purchasing USD/INR because the 82.70-82.80 level provides strong support. Traders may seek buying opportunities in the USD/INR pair. Traders employ the risk-reward ratio to balance their gains and losses. The ratio is important in determining a trade's risk and projected return. In general, rising risk yields bigger expected profits. Anything more than 1:2 is considered an excellent risk-reward ratio.
Examine the levels of support and resistance on the daily USD/INR chart. Each level is displayed on the spot chart.
|
USD/INR |
Support |
Resistance |
|
Level 1 |
82.70 |
83.50 |
|
Level 2 |
82.50 |
83.70 |