The USD/INR pair had a very weak session during Monday, pressuring the trend line that has been supporting the US dollar versus the Indian rupee, as we continue to see the US dollar favored in general. However, I would draw your attention to the fact that there is a hammer that formed just a few sessions ago at the 60.50 level, and this uptrend line, making this an area of interest for longer-term traders.
As you can see, we have been in an impulsive move higher for some time but we are most certainly testing the waters of a bearish move at this point. Keep in mind that the Indian rupee is more or less a play on global markets, with more of a focus on Asian growth. The Indian rupee is a higher yield or when it comes to interest rates for the most part, but we have to keep in mind that the Indian government can at times be somewhat unfriendly when it comes to business.
This is partially because of their previous association with the Soviet Union, back during the Cold War days. With that, India can be at once a very capitalistic economy, with some intertwines of Socialism here and there. Nonetheless though, the Indian economy is a very dynamic one and an excellent way to play a merging markets.
I think that there is a significant amount of support and the 60.50 level, and therefore it is an area that I’m paying quite a bit of attention to. Ultimately, if we can break down and close below both the uptrend line in the aforementioned level, I don’t see any reason whatsoever why this market could go down to be 60 handle over the course of the next couple of sessions.
Watch Asian markets overall.
Watch the Nifty, and other Asian markets in order for an idea of where the Rupee should go given enough time. On the other hand, if we do get a bounce we are, we could very well continue the uptrend but without a doubt this market is starting to look a little bit long in the tooth.
