USD/INR Analysis and Path Ahead
Morning Update: Will the USD/INR pair bounce or break down at the 83.10 zone?
Over the past few weeks, the USD/INR pair has been fluctuating between 83.10 and 83.30, however the DXY has recovered from the crucial support zone of 100.80 and is presently trading close to the 102.50 levels.
- The USD/INR suffered a slight decline today; it may have found support near 83.00-82.90 levels.
- We continue to see support at the 83.00 zone and strong resistance at 83.50 in the USD/INR pair.
- A sustained break below 82.90-83.00 zone exposes the 200 EMA and DMA both reside around the 82.70 zone and below that 82 area is open respectively.
Please have a look at the chart above and recognize its significance. It seems highly probable that the Rupee will remain around the 83.00–83.50 area going forward. But keep in mind that the Reserve Bank of India is always ahead of others in terms of stabilizing the currency pair and is highly aggressive in selling dollars. The USD/INR continued to trade below the 83.50 levels and above the 200 DMA / EMA. For the last few weeks, USD/INR has been circling the 82.25 zone, while dollar index has been trading at the 102.50 zone after rising from the key support zone of 100.50-100.80.
The option chain indicates that the resistance zone for the USD/INR is at 83.50 strikes, where we can see huge call writing. According to this, there could be significant resistance for the USD/INR in the 83.50 range in January. Below that, the 200 DMA / EMA is open till 82.70. The doors to the 82.20 and 82.00 zones respectively, open with any breach below the 200 DMA.
The Dollar-Rupee pair (USD/INR) has been consolidating for several months in the range of 83.00 to 83.50, as indicated by the chart and option chain. In the upcoming days, we can see directional moves beyond this area. Remember how the Reserve Bank of India (RBI) is pressuring demand by selling dollars. Despite the extreme volatility of the dollar index, USD/INR has not changed considerably.
In the upcoming days, we can anticipate that 83.50 will act as a strong barrier and that the downside is open for the 82.90–83.00 zone. Below that, the 200 DMA/EMA and breaching it will allow for additional declines towards the 82.00-82.20 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 |
82.70 |
83.40 |
|
Level 2 |
82.10 |
83.50 |