USD/INR Analysis
Morning Update : USD/INR is trading at 83.30 zone, will it reverse or breakout ?
While USD/INR has been trading at the 82.25 zone for the past several weeks, DXY has bounced back from the key support zone of 100.80 and is currently trading near the 101.40 levels.
- This week saw a modest rally in the USD/INR, which quickly found support in the 83 area and strengthened.
- In the USD/INR pair, we continue to observe strong resistance at 83.50 and significant support close to the 83 zone.
- The 200 Day EMA and DMA both reside around the 82.60-82.70 zone, which also serves as a strong support zone.
At this point, it appears very likely that the Rupee will continue to stay in the range of 83 to 83.50. However, bear in mind that the Reserve Bank of India is very aggressive in selling dollars and is always ahead of others when it comes to stabilizing the currency pair. The USD/INR staying above the 200 Day EMA could allow for a move to the 83.50 levels. As opposed to DXY, which is currently trading at the 101.40 zone following its up move from the significant support zone of 100.80, USD/INR has spent the last several weeks circling the 82.25 zone.
Now let's understand the USD/INR January monthly option chain :
We can observe call writing at 83.50 strikes and put writing at 83 strikes in the option chain that is indicated in above mentioned table. It implies that in January, the USD/INR could fluctuate between 83 and 83.50 zone as per option chain. According to the chart and option chain above, the Dollar-Rupee pair (USD/INR) has been consolidating for a number of months within the area of 83.00 to 83.50. It appears that this consolidation will continue. Because of the Reserve Bank of India's (RBI) actions, USD/INR has not changed significantly despite the dollar index's high volatility. Trading USD/INR in a particular direction is difficult at the moment because, as the chart indicates, 83.50 is the resistance level and 83 is the support zone.
Take a look at the support and resistance levels of USD/INR on the daily chart. All levels are in spot chart :
|
USD/INR |
Support |
Resistance |
|
Level 1 |
83 |
83.40 |
|
Level 2 |
82.70 |
83.50 |