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USD/INR Forecast: US Dollar Floats Higher Against Indian Rupee

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • The first thing I notice is that the US dollar has exploded higher against the Indian ultimately, this is a pair that represents a huge portion of Asian trading, and the idea of risk appetite and that part of the world.
  • Quite frankly, we have just made a major breach of resistance, and it makes a lot of sense that we would continue to go higher.

USD/INR Forecast Today - 06/08: USD Rises vs INR (Chart)

The Central Bank of India seems to have lost its fight to protect its currency, which of course does make a certain amount of sense, because quite frankly the world seems to be on fire. As long as risk appetite continues to get eviscerated, we are not likely to see a lot of strength in exotic currency such as the Indian rupee. At this point, it looks very likely that we are going to continue to go higher, perhaps trying to reach the ₹85 level over the longer term.

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Support Below

Keep in mind that the ₹83.80 level is an area where we had seen a lot of pressure previously, so therefore a certain amount of “market memory” could come into the picture, offering the possibility of some type of “floor in the market.” The 50-Day EMA underneath also offer support, and I think a lot of people will be looking at that as a potential “floor in the market.” I like the idea of going long the USD/INR pair on a pullback, but I also recognize that it is typically very choppy and noisy, and therefore I think it’s going to be very difficult to hang on to a huge position.

I believe at this point, you have to be looking at this through the prism of a longer-term buy-and-hold type of scenario, as we have been so bullish for so long. This is a simple continuation of the massive uptrend, and the idea that the trade would suddenly change is foolhardy at best. We have entered a new dimension when it comes to risk appetite, and it certainly looks as if things are about to get worse.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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