USD/INR – Weekly Outlook & Analysis for 21st January 2021
USDINR Forecast & Technical Analysis for Forex
Introduction
The Greenback is slowly giving way to the Indian Rupee on all India Forex Trading brokers, ahead of more stimulus package from the Biden-Harris administration.
The USD Index shows signs of continuing the downward spiral.
Read on for more insights into the events driving the USDINR exchange rates.
India’s Fundamentals
The past news events for India’s economy, such as the current account (USD), M3 Money supply, and USD balance payments, kept the USDINR exchange rate within a trading range of 72.658 and 75.087.
Now that the dust has settled for INR news, the USDINR starts to take advantage of the weak Greenback, following a successful Biden-Harris inauguration, which should usher in policies towards increased stimulus package.
US Fundamentals
Investors anticipate a rollout of the 1.9 trillion USD stimulus package following a successful Biden-Harris inauguration on Wednesday.
Pictet Asset Management manager Shaniel Ramjee stated that there are limits to how monetary policies can affect real economies.
He further iterated that the Fed will buy US Treasury bonds to finance such fiscal programs.
Comments by Yellen caused a slump in the USD from a monthly high.
Positioning data from Reuters also shows investors lean more towards a bearish Greenback in the face of current account and betting budget.
Traded against a currency basket, the USD Index DXY slumped by 0.1% after an earlier 1.2% rise about two weeks ago.
Ebrahim Rahbari, an FX strategist at CitiFX, stated a bearish undertone on the US dollar with expectations of a continued down USD trend.
The price of the safe-haven asset, gold, increased to 1870/ounce at press time. Also, oil prices climbed following a positive outlook on the Biden stimulus proposal, with the US crude oil futures at 0.7%.
USDINR Technical Analysis
USDINR Monthly Chart Projection: Bullish Correcting
Monthly Resistance Levels: 77.45, 74.65
Monthly Support Levels: 72.65
The Indian Rupee is slowly gaining more ground against the USD across online broker websites, starting with the bearish divergence and breakdown of the critical support at 74.653.
Speculation around a bounce back from the USD keeps the USDINR exchange trading within the MA20 and MA10.
USDINR: Weekly Chart
Weekly Resistance Levels: 75.478, 77.401, 74.459
Weekly Support Levels: 72.066, 72.658
After the bulls failed to drive the USDINR exchange rate beyond the 77.40 marks, the bears slowly took over my first, moving the price into a range before a final collapse below the 74.459 level.
The USDINR again found resistance at 74.459, and we expect the downward price decline to continue.
USDINR Daily Projections: Bearish-consolidating
Daily Resistance Levels: 74.216, 75.087, 73.802
Daily Support Levels: 72.870
The current death cross of MA10 and MA20 is a product of the daily time frame price resistance set up at 75.087 and 74.216.
A more recent slump of the support area at 73.802 again leads to the sharp price slump we witness at press time.
The pair may find support or perhaps slow down upon entering the 72.870 support level.
Bullish Scenario:
Although the USDINR trades in the ten and twenty Moving Average level, the bears continue to show strength. However, a price close above the MA10 should confirm a short-lived bearish swing.
Bearish Scenario:
We expect a decline in the exchange rate in the mid to long term, given the divergence setups on the monthly and resistance levels established weekly and daily.
Conclusion and Projection
The most likely scenario for the USDINR in the long term is a price slump. However, traders can look out for short term intraday swings to the upside.
A continuous slump of the USD Index will mean a strengthening of the Indian Rupee.
No Comments found