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USDINR – Weekly Outlook & Analysis for 29th April 2022

Introduction

The USDINR pair has been bullish for some weeks and the trend may likely continue as you can see on the online forex platform. 

India is likely to become the third-largest consumer economy by 2025 as its consumption may triple to $4 trillion based on the consumer behavior and expenditure pattern based on BCG’s report (Boston Consulting Group).

India’s Fundamentals 

The Indian economy has witnessed some levels of improvement across various sectors as investment continues to boost the economic activity of various sectors. For example, in the private sector equity -venture capital had an investment worth about $6.8 billion across various 101 deals after the pandemic crisis as of November 2021 with 42% higher than November 2020.

Other recent development can be seen in the CPI (Consumer Price Index), including inflation which came at 5.20% in 2021-2022 (April-December) against that of the year 2020-2021 (April-December) with 6.6%. 

The Gross Goods & Services Tax revenue collections stood at about 138 trillion (Indian Rupees).

US Fundamentals

US CORE PCE PRICE INDEX M/M

The core PCE price index focuses on the goods and services that are targeted toward individual consumers. The report measures the changes in the price of services and goods that individuals purchased and consumed excluding food and energy. Each item is weighted according to its expenditures which also gives important insight into the behavior of consumers’ spending habits.

This report is a tool for the Federal Reserve in measuring the level of inflation and the Banks raise the interest rate as a measure to control inflation. The forecast is 0.3% while the previous data was 0.4%.

USDINR Technical Analysis

Monthly Chart Projection: Trades within the correction area

USDINR monthly chart - 29th April 2022

Monthly Resistance Levels: 77.450, 80.00

Monthly Support Levels:  72.00, 73.00. 

The USDINR pair has been crawling up steadily in the past months as the price heads to the resistance zone of 77.45 the Indian rupee has lost some position against the US dollar as the ascending triangle chart pattern can be seen on the monthly timeframe.

From the monthly chart scenario, the USDINR may see the price breakout above the resistance zone for the trend to continue its uptrend, however, if the price fails to breakout above the zones, the online brokers who want to short the market will be looking out for reversal candlesticks around the resistance zones for the price to go down.

Weekly Chart

Weekly Resistance Levels: 78.00, 77.40.

Weekly Support Levels: 74.00, 72.00, 75.00

The weekly chart of the USDINR pair shows that the price is in an uptrend as the swing is making higher lows and higher highs. Looking at the forex platform, we can see the price respecting the trendline connecting the lows by bouncing off from the trendline.

The bullish rally continued after the 04 April weekly candle closed in a hammer formation which led to the buying bias of the market. If the momentum continues, the online brokers with a long positions will expect the price to breakout above the 77.40 highs. 

The resistance zone of 77.40 and 78 is a psychological zone for the market participants on the forex platform. The sellers will need a strong reversal pattern from the zone if they are to push the Bulls back to the 75.00 levels. However, the US dollar has been strong in the last 3 weeks and it may be difficult for the sellers at the moment.

Daily Projections: Breakout of Descending Triangle

Daily Resistance Levels:  76.72, 76.60, 77.13.

Daily Support Levels: 75.93, 75.30.

The Indian rupee made a deep retracement from the high of 77.13 after the Bull’s rally was exhausted and the Bears took the price down to the 75.30 zones. The Bulls took over the trend from the 75.30 levels after the morning star candlestick formed at the support level and the online brokers will likely take the price higher towards the high of 07 March 2022.

The forex platform has been trending lately as the sentiment of the online brokers and investors reacts to the hike in the interest rates by the Feds. Also, the Indian rupee has lost the most among the Asian currencies since Ukraine and Russian wars broke out.

Bullish Scenario:

A bullish scenario is expected to run until the price hits the resistance zone of 77.00, as the current trend remains bullish. A breakout above will mean a continuation of a bullish run on the USDINR pair.

Bearish Scenario:

The Bear’s scenario is not certain at this time as the trend presently favors the Bulls. If the previous resistances can reject the Bull’s advancement from the 77.00 levels, we may see the Indian rupee making gains against the US dollar.

Conclusion and Projection

The action of online brokers, investors, and institutions can be seen on the forex platform as they take long positions due to geopolitical situations happenings and the hiking of the interest rate. The price of the USDINR pair is expected to hit the resistance zone in the weekly time frame.



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