The US dollar broke higher against the Indian rupee during Friday trading, as we broke above the top of the hammer that had formed from Thursday. What I find so interesting about this move is that we broke above the top of the hammer that sits right on a nice uptrend line. This is classic technical analysis, and as a result I look at it as a buying opportunity. Yes, I know that many of you will not have experience trading this pair, but it is a simple representation of how money is flowing in and out of emerging markets. It is obvious that the US dollar is favored against the Indian rupee, so this is a nice trend you can trade over and over again.
With that being the case, it appears that we are going to go higher, probably the 62 level first, and then possibly even higher than that given enough time. I think that there is more than enough bullish pressure underneath to keep the greenback going higher against most currencies, and the Indian rupee certainly would fall in that category. After all, it is in exactly the place where people want to invest when they are looking for perceived safety.
Following the trend
I am currently just following the trend. It’s really not a whole lot to do in this pair beyond that, as I recognize that it tends to grind as it is in exactly the most heavily traded pair. However, it is a nice pattern and that’s exactly what we look for when it comes to technical analysis. I don’t see any reason why we don’t go to the 62 handle, and what frankly I think we are going to the 65 handle given enough time. I think that pullbacks continue to offer value on short-term charts, and that the buyers will certainly take advantage of the upward trajectory that we have seen for some time. This is a trend line that has done quite well for some time, and I don’t see anything on this chart that suggests that’s going to change anytime soon.
