- During my daily analysis of exotic currency pairs, the USD/INR currency pair has caught my attention as it looks very bullish at the moment.
- The market continues to see the US dollar favored over the Indian rupee, for a whole litany of reasons, not the least of which would be the fact that the risk appetite of traders around the world might be a little bit distorted as we are concerned about the global economy slowing down.
Remember, the Indian economy is highly sensitive to global growth, especially as it relates to Asia in general. All things being equal, the market is likely to continue to see a lot of people pay close attention to the idea of whether or not things are going to start to slip off as far as global trade is concerned. Remember, although India is one of the stronger emerging markets in the world, it is of course very sensitive to its export sector.
Interest Rates
The interest rate differential between the 2 economies is only just about 1%, so it’s not necessarily something that is going to make a huge difference. Because of this, it’s not such a concern to get long of this market, and therefore you don’t have to worry about the interest rate differential causing a lot of issues.
Furthermore, you need to keep in mind that the ₹84 level has been important multiple times, so if we pull back from here, I think that would be a “floor in the market”, as it was previously a major resistance barrier.
Top Regulated Brokers
Because of this, I think that the ₹84 level will be a crucial factor going forward, and it could be a short-term trend defining level as well. If the market can break above the 84.225 level, the market is likely to continue to see the US dollar could go looking to the ₹85 level over the longer term.
On the other hand, if the USD/INR currency pair breaks down below the ₹84 level, it’s likely that the market could drop down to the 50 Day EMA, which is closer to the ₹83.87 region. All things being equal, this market continues to look very bullish and therefore I think you need to look at it through finding value when you can.
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