USDINR – Weekly Outlook & Analysis for 1st October 2021
USDINR Forecast & Technical Analysis for Forex
Introduction
On the India forex platform for this trading week, the buyer’s sentiment may likely continue as the previous week ended in a buying bias. The Indian economy is still passing through the recovery process as the economic activities are picking up.
India’s Fundamentals
The COVID-19 pandemic hit the progress of the Indian economy, which had earlier achieved about 7.2% growth and reduced inflation by 3.6% from the high of 4.5% since 2014.
Before the crisis, Indian labor force grew by 14.5% and capita income increased by 6.8%. Likewise, Indian’s stock market was recording its all-time high as of January 2020, which reflected on the investor’s outlook on the economy.
The Indian Rupee and its economic scenarios changed when COVID-19 was declared a pandemic and businesses were closed because of the lockdown. It affected the GDP, which contracted 23.9% in Q1 and 7.5% in the second quarter (YoY). Production fell from +4.61% to -8% since the lockdown because the factory workers couldn’t work.
The Indian economy is seeing an enormous leap in e-commerce since its digital adoption.
US Fundamentals
ISM MANUFACTURING PMI
The ISM manufacturing PMI has a different way of analyzing its data from core CPI. They measure the goods and services consumed by individuals based on the price-weighted per item. This in return shows consumers’ spending behavior. Some analyst thinks the Federal Reserve favors the use of ISM data for inflation measures.
They carried the survey out among 300 purchasing managers who were asked to rate the level of business conditions in areas like production, new orders, employment, prices, inventories, and supplier deliveries.
A data report above 50.0 shows an expansion in the industry, while a lower figure shows contraction. When we get a result greater than the forecast, it is good for the currency and a lower outcome is not suitable for the dollar.
Forecast data is 59.6 while the previous was 59.9.
USDINR Price Analysis
Monthly Chart Projection: Trades within correction area
Monthly Resistance Levels: 75.00, 74.40, 75.60
Monthly Support Levels: 72.332, 72.930
Bull’s momentum was stronger from the support of 72.930 as of Sept 01. We may see the bullish run back to the 74.40 zones. Could this mark the end of the bullish flag correction on the monthly time frame?
If the buying pressure can close above the resistance levels of 74.40, we can say that the correction phase is over. The Indian brokers who are in a long position will still need stronger momentum to breakout above the other resistance of 75.60 and 77.02 before we can see another bullish swing.
Weekly Chart
Weekly Resistance Levels: 74.38, 75.00, 75.59
Weekly Support Levels: 72.33, 72.93
For the past three weeks on the chart, we can see that the Bulls have dominated the market and they are pushing price towards the high of 74.3856. A breakout of the range will give the US currency dominance over the Indian rupee and the next resistance zone of July 19, 2021 (75.0192) will be the target.
The 74.3865 zones are likely going to be a psychological zone for the sellers because of the order blocks that took the price down. If the block is still valid, we shall see rejection around the zones, but if the zone is not active, the bull’s momentum will close above the region.
Daily Projections: Breakout of Descending Triangle
Daily Resistance Levels: 73.903, 74.5415, 75.000
Daily Support Levels: 72.841, 73.000, 73.500
For some days, the buyers have been rejecting the seller’s pressure from the 73.818 support levels. The seller’s aim is to close below the support level of 73.500 to reach the zone of 72.841 for the USDINR pair to continue the bearish trend.
Likewise, for the buyers, they need to close above the resistance zones of 73.903
For the pair to go up to 74.5415. The bulls are facing two resistances from the previous support level turned resistance and a resistant trend line connecting the high of 75.000 with that of 74.5415. if the Bulls cannot breakout above the zones, we shall see the price reverse from the zones.
Bullish Scenario:
The bullish online brokers have been enjoying the bullish rally since the start of the month and we expect the long position traders to reach the 75.00 levels. A breakout of the zone will probably take the price higher on the monthly chart.
Bearish Scenario:
The Indian rupee has lost its gains against the US dollar on the daily chart after it failed to close below the 72.93 level in the daily time frame. If the Bears can push back the price to close below, the support zone shall increase the selling pressure.
USDINR Conclusion and Projection
The US dollar has gained more strength over the Indian Rupee in the past weeks and the pair may continue to experience an uptrend if the daily high of 94.00 is taken out by the long position traders.
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