USDINR – Weekly Outlook & Analysis for 31st July 2021
USDINR Forecast & Technical Analysis for Forex
Introduction
The Bullish run of USDINR in the brokers in India has slowed down in July because of the new variant of the coronavirus that is threatening the recovery process and progress of the global economy.
Negligence of the healthcare system in Indian made it incapable to handle the COVID-19 pandemic. Had the Indian government built a robust health system, the humanitarian crisis wouldn’t have been so catastrophic.
India’s Fundamentals
The Indian central bank is preparing ahead of the Fed meeting as the Indian rupee bulks up against outflows when the Feds make their decisions known about the interest rate. The Indian health system and economy have come under pressure the waves of the coronavirus keep spreading across the Asian region.
Since the first wave occurred, it has affected the progress achieved over years or decades as many Indians who have broken out of poverty were faced with the dilemma of regression in the economy. Over 200 million Indian citizens will earn less than the minimum wage or ($5/day) according to the Bangalore-based Aim Premji University calculations since the pandemic began in 2020.
US Fundamentals
FOMC
Ahead of the FOMC meeting coming up, online brokers and other investors will have to trade in a cautious manner to avoid being on the wrong side of the market when the statements are released.
The Federal Reserve members will meet and discuss the monetary policy of the economy and rate decision at which depository institutions lend to other institutions overnight. These interest rates are priced into the market at the release of the minute of the meeting.
However, the FOMC statement is directed on the future of the economy and how they intend to control the economy and economic activities. How the FOMC voted in order to arrive at the targeted interest rate is also published in the statement released. If the actual data is greater than the forecast, it is good for the US currency but if it is lower than the expected outcome it is not suitable for the currency.
The previous outcome was 0.25% and the forecast is 0.25%
USDINR Price Analysis
Monthly Chart Projection: Trades within correction area
Monthly Resistance Levels: 76.45, 75.59, 74.99
Monthly Support Levels: 72.27, 68.00
The previous month ended with a strong bullish candle which led to the bullish bias of the market sentiment. The July candle has not gotten the needed momentum to push the price higher than the resistance zones of 74.99. The Bulls will need stronger momentum to push through the various levels of resistance before it can continue the uptrend on the higher time frame.
If the Indian rupee should gain strength and close below the 72.27 levels, we shall see a bearish run on the monthly chart to the next support zone of 68.00.
Weekly Chart
Weekly Resistance Levels: 75.59, 74.99
Weekly Support Levels: 72.2746, 74.1935, 73.30
Since May 2021 the long position, traders have gained momentum from the low of 72.27 which took the price of up to the high of 74.99. Since the recent surge of COVID-19 in the Asian region and other parts of the continent it has weakened the Indian rupee currency and other emerging currencies because of the lockdowns and restrictions imposed to curtail the spread of the virus.
We can see that the 74.99 level has rejected the bull’s advancement for the past 3 weeks. A close below the 74.19 level may take the price lower to the 73.30 level if the selling pressure is strong.
If the selling pattern should fail to close below the support zones, we may see the bulls push the price to close above the 74.99 and 75.59 levels for another bullish surge out of the 75.59 zones to reach the previous high of 2020 (77.416).
Daily Projections: Breakout of Descending Triangle
Daily Resistance Levels: 74.99, 75.51
Daily Support Levels: 72.27, 74.19, 73.33
The bullish run that started from the support level of 72.27 has been sustained having gained momentum on the forex platform with a close above the previous resistance level. The market has been creating higher highs and higher lows for some days. A breakout above the 74.99 and 75.51 resistance zones shows the Buyers are aiming for a higher price target as the Indian rupee weakens.
The high of 75.51 is a psychological zone for the online brokers because we may have two scenarios, the short position traders may take over the market from the zone or we see another strong bullish projection when the price closes above the zones.
Bullish Scenario:
The online brokers were able to sustain the bullish run having closed above the 73.33 levels before the recent resistance level of 74.99. slowed the bull’s momentum. The bulls need to close above the 74,99 for the trend to continue.
Bearish Scenario:
The Bear’s selling pressure has dominated the market from the 74.99 zones by rejecting the Bull’s advancement.
A total dominant of short position traders and online brokers may push the price to the support level of 72.27 and a close below will strengthen the Indian rupee further.
Conclusion and Projection
The recent wave of the delta variant is likely going to change the decision of the Fed in the forthcoming meeting as they plan to end the coronavirus stimulus program. Traders, investors, online brokers will have to wait for the Fed’s outcome so that they protect their investments against the uncertainty of the market.
Market participants are geared towards the possible action of the Fed in asset purchase reduction and hike trajectory which will affect the Emerging currencies.
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