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USDINR – Weekly Outlook & Analysis for 14th January 2022

USDINR Forecast & Technical Analysis for Forex

During the trading week, an analyst from the IMF position stated that the emerging economies must put the US interest rate hikes into consideration and prepare for it because the Federal Reserves action can come earlier and it could unsettle the forex platform making investors withdraw capital from the financial market and causing currency deprecation abroad. 

Forex platform, online broker, Indian rupee

India’s Fundamentals

The Indian economy is among the emerging economy and it should expect some turbulence as the USA central bank hikes its interest rates sooner than expected. According to World Bank projections for India’s economy, it forecasted 8.3% growth for the year 2022 and 8.7% for the financial year of 2023. The government of Indian had projected a 9.2% growth higher than that of the World Bank. 

However, the World Bank analyst projected that the global economy faces a grim outlook as the global economy enters a slow down amid fresh threats from the COVID-19 variants.  

US Fundamentals

USD CPI m/m

The CPI samples the various products and services concerning their average prices and compare prices to the previous samplings. The Bureau of Labor Statistics measures the changes in the price of products and services purchased by consumers. The feedback is important to the policymakers as consumer prices account for the overall inflation and out of respect the central banks raise interest rates as a containment mandate.

The outcome of the Consumer Price Index will determine the state of the currency. 

Forecast 0.4%, previous 0.8%.

USDINR Long term Price Analysis

Monthly Chart Projection: Trades within correction area

USDINR monthly chart - 14th Jan 2021

 

Monthly Resistance Levels: 75.00, 77.416

Monthly Support Levels: 72.47, 72.86

As of 02 March 2020, the price of the USDINR pair got to the high of 77.416 at the time of the pandemic saga before the rejection of price happened. Due to the various crisis of the pandemic, the online brokers have not seen any major move on the monthly chart.

The Indian rupee has made about 3.70% running from the high of 03 December 2021, if the momentum can be sustained the price can drop to the low of 72.86 zones. A close below the zone will take the price lower towards the 72.47 zones. If the Indian rupee should lose its momentum, we may the price bounce from the zones for an upward movement.

Weekly 

USDINR weekly chart - 14th Jan 2021

 

Weekly Resistance Levels: 75.70, 76.53

 

Weekly Support Levels: 73.75, 72.80

 

From the weekly chart, the week’s candle of 20 December 2021, closed bearish and engulfed the bullish candle of 13th December 2021, showing strength for the Indians rupee which took the price down to the current support level. The price has tested the support zones previously, if the price should close breakout below the level, we shall the price fall to the support level of 72.80.

However, the current area of price is a psychological zone for the online brokers because the zone has acted as a resistance and support previously. Some long position traders a be looking for an opportunity to go long from the zone if they see a strong rejection of price.

Daily Projections: Breakout of Descending Triangle

Daily Resistance Levels:  76.44, 74.70

Daily Support Levels: 72.98, 73.80.

The bullish railway candle on the 9th November 2021 was able to swing for days on the forex platform before the trend was reversed around the 76.44 resistance zones. On the daily chart, the Indian rupee dominated the market with good gains against the US dollar. 

The trend has been running for some days and it is sitting on the support level of November 9th, 2021 (73.80). A close below will take the price lower to the support level of 72.98.  As of writing this report, the days trading activities are bullish and if the momentum is in favor of the Bulls the price will likely test the high of 74.70.

Bullish Scenario:

From the forex platform, we can see that some online brokers who are biased for an upward trend will be expecting a stronger push back of price from the support zones of 73.80 on the daily time frame.

Bearish Scenario:

The Indian rupee made about 3.48% gains against the US dollar and the trend is still bearish. If the price can close below the current support zones, we expect the downtrend to continue. 

Conclusion

The USDINR pair is in a psychological zone and the online brokers are following the progress of the Indian rupee because a breakout below will likely show the weakness of the US dollar. However, a bounce from the zone will reverse the direction of trade on the forex platform.



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