- The US dollar has pulled back just a bit during the early hours on Thursday, showing signs of weakness against the Indian rupee.
- However, the market has shown enough support near the ₹83.25 level, an area that has been important multiple times.
Expect Consolidation
It’s also worth noting that the USD/INR market looks as if it is trying to form some type of hammer, which of course is a bullish sign as well. Furthermore, you should also keep in mind that we have recently seen a nice shot higher, and have since been consolidating, and we are at the bottom of the consolidation.
The market will more likely than not continue to see a lot of noisy behavior, but it’s probably worth noting also that the Indian rupee is somewhat manipulated buying the central bank in India, as they only allow it to float so much. With this, I think it probably keeps a little bit of a lid on the greenback but given enough time I do think that the interest rate situation in America continues to push the greenback higher, even if it would take a little bit of effort at this point.
Top Regulated Brokers
If we rally from here, the ₹83.55 level would be my target, and then after that we could be looking at the ₹83.75 level. Remember, this pair doesn’t exactly take off to the upside or downside often, and it is more of a growing than anything else. That being said, if we were to break down below the ₹83.25 level, then it’s possible that we could drop down toward the 200-Day EMA, which is closer to the ₹83.03 level.
Ultimately, I think this remains a “buy on the dips market”, as we have seen so much in the way of bullish pressure over the last several months when it comes to the greenback, not only against the Indian rupee, but most other currencies as well. With this, I like the idea of buying these dips as an opportunity to build up a longer-term position that I hold onto.
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