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USDINR – Weekly Outlook & Analysis for 11th June 2022

Introduction

Long term traders’ sentiment favors the upside momentum on the forex platform as the USDINR continues to print higher peaks and valleys on the weekly time frame, since 07 June last year. 

Last week’s bearish closing hidden inside bar suggested an accumulation of sell order, however, the bulls have shown that it’s not sufficient to immediately send the exchange rate into a downward spiral. A bearish closing price below the psychological price 77.371 will confirm selling decision. Let’s analyze the charts further.

India’s Fundamentals 

The Indian data on GDP for Q1 shows double figures on (CST) collections when reports on goods and services tax topped the 1.4 lakh core for the 3d month into May when the report was released on June 1, 2022. 

However, the report from the PMI (The Manufacturing Purchasing Managers Index) shows that it is in the growth zone of 54.6 in that month.

US Fundamentals

CORE CONSUMER PRICE INDEX m/m

When accounting for the CPI report, the energy and food prices are usually volatile and can distort the trend. The FOMC, traders, and online brokers pay attention to the core data.

The CPI report measures the changes in the price of goods, services, and other items the consumers may purchase but does not include the price of food and energy. A greater outcome of data is good for the currency but a lower data is not suitable for the US dollar.

Federal Reserve pays attention to consumer prices because it accounts for the overall inflation. If the prices of goods and services are on the rise, the central bank increases the interest rate to contain the level of inflation.

The USDINR bulls expect higher readings as it would further support their cause. Forecast data is 5% while the previous was 6%.

USDINR Technical Analysis

Monthly Chart Projection: Trades within the correction area

USDINR monthly chart - 10th June 2022

Monthly Resistance Levels: 77.030, 78.75

Monthly Support Levels:  72.98, 74.43. 

The online brokers have taken the price higher above the previous resistance level of 01 April 2020 (77.00) on the monthly chart, the 01 April 2022 candle broke out above the previous zone after two years. from n see that the long position traders and closed above the resistance zones of 77.74 

Weekly Chart

USDINR weekly chart - 10th June 2022

Weekly Resistance Levels: 78.00, 77.88.

Weekly Support Levels: 77.37, 76.00

The price pulled back towards the 77.37 zone at the close of 30 May 2022 before the new trading week started with some bullish surge. A close above the recent high of 78.00 will take the price high and the Indian rupee will be weaker against the US dollar.

 The IMF is currently reviewing India’s growth projection for the year 2022, it might be lower than the previous forecast of 8.2%, however, it is in progress according to Luis Breuer (IMF Senior Resident Representative in India)

Daily Projections: Breakout of Descending Triangle

Daily Resistance Levels:  77.90, 77.37.

Daily Support Levels: 76.00, 75.25, 74.40

Looking at the daily time frame on the forex platform, you can see that bullish online broker are long-term bullish against the Indian rupee. The market has been making successive highs and higher lows before the price broke above the resistance zone (77.37) of 2020. 

The USDINR pair is consolidating after the breakout, there is the possibility that the price retest can retest the broken resistance turned support before it continues the uptrend on the fore platform. If the current support zone should give way, the breakout will be false. If the support level should hold, we expect the price to rise.

Bullish Scenario:

The bullish scenario will continue when the price breaks out of the consolidation state and the online brokers who are on long trades will need to take the USDINR pair above the high of 77.700 on the daily chart.

Bearish Scenario:

The Indian rupee is currently weak against the US dollar as the bullish swing continues. If the pair goes into the correction phase, the Indian rupee will be stronger than the US dollar and a bearish trend can happen in the lower time frames before the primary trend resumes. 

A breakout below the support level (77.37) on to the daily time frame means that we may see the price move in favor of the Indian rupee.

Conclusion and Projection

The USDINR pair is in a bullish trend as the swing continues to make higher highs and higher lows. The price has broken a psychological resistance zone which means that the bullish run may continue after the consolidation phase is over. Online brokers in long positions can hold on to their position for a breakout above the 78.00 zone for more gains trading on the forex platform.



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