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USDINR – Weekly Outlook & Analysis for May 26 2019

USDINR Forecast & Technical Analysis for India Traders


The India forex market is another market that the OlympTrade traders are interested in because of the RBI decision on rate cut and how it may affect the market in the coming weeks.

As the race to deliver the vaccine for Covid-19 continues, the government wants to reopen businesses, get people back to work, and open the schools again as they hope for a quick recovery.

India’s Fundamentals

The Indian Reserve Bank had a sharp cut of its rate in an unscheduled cut, and the USDINR saw a minor loss to the USD. This was because of the effects of coronavirus on the economy, and they probably an extension of the lockdown.

For this coming week, we see INR performance to be weak against the USD. However, a 40bp to 4% cut in RBI benchmark repo rate is observed with a five to one vote.

U.S. Fundamentals

The message from Powell during the Fed’s meeting hinted on more probability of government spending. From the minutes’ report, inflation is the last thing to worry about, but the total effect of the outbreak on prices was seen as dis-inflationary.  

The Core Durable Goods Orders help to know the number of new orders placed with manufacturers for durable goods. With increased orders, it signals that the manufacturing activities will increase also; it is an important gauge of purchase trend and a leading indicator for the projection of all durable goods for production.

Previous data released was -0.4%, and Forecast is at -14.2%. If the Actual is greater than the Forecast, it is good for the currency, but if it is lower, it is bad for the currency.

We shall await the release of data to see how investors and online brokers would react.

USDINR Price Analysis

USDINR Long term Projection: Bullish

Monthly Chart

USDINR Outlook - Monthly Chart - May 26 2020

Monthly Resistance Levels: 76.00, 77.416 

Monthly Support Levels: 63.160, 64.126, 68.123, 70.148, 72.203, 74.365

Since the rejection of price from the resistance level 77.416, the Indian Rupee failed to maintain its push further down towards the support zone of 72.203. 

On May 01, 2020, the Support level of 74.365 put the bulls in control, taking the price up to its current level as we write this report.

Weekly Chart

USDINR Outlook - Weekly Chart - May 26 2020

Weekly Resistance Levels: 77.416, 75.820

Weekly Support Levels: 74.214, 72.066, 71.560, 70.194, 68.123

After weeks of consolidation, USDINR broke above the resistance level of 72.006 and 71.550, putting the bulls in control. From the resistance of March 16, 2020, price retraced back to the support of March 23, 2020, 74.214.  

The price has been in a range for the past weeks, a breakout to either side will expose the next levels of resistance or support.

USDINR Medium-Term Projections: Bullish Correction

Daily Chart

USDINR Outlook - Daily Chart - May 26 2020

Daily Resistance Levels: 76.600, 77.416

Daily Support Levels: 71.073, 71.372, 71.886, 73.450, 74.360, 75.100

The Indian Rupee lost its momentum against the USD from the last resistance of March 24, 2020 (77.416 and 76.600), taking the price down. 

The recent candle closure on a daily chart engulfed previous day candles, showing more buyers in the market. This has a higher probability of price moving up in the coming days ahead.

4HR Chart

4Hour Resistance Levels: 77.00, 76.822, 75.904, 75.505

4Hour Support Levels: 74.694, 74.386, 73.990

The bearish run on USDINR started with regular bearish divergence since April 21, 2020, taking the price to 73.990 before price found firm support that has been pushing the USDINR back to the resistance level of 755.505.

If the bulls’ momentum is secure, we can see price breakout above the resistance level and a further surge to the upside.

 Bullish Scenario:

If they sustain the bullish trend in the long run, we need to see the ascending triangle taking out. Once the price has gone above the resistance (75.505), more buyers are coming into the party.

Bearish Scenario:

The resistance level of 75.505 has held for days. If the current move of the price is not keen to break through, we may see another rejection of the bulls’ runs and a push of USDINR back to its previous support level.

Conclusion and Projection

The price of USDINR is bullish, and if its momentum is strong, we may see more online broker participation in the coming week. The psychological zone of the market is the 75.505 resistance zone. Whatever happens, there will be significant in decision making for various traders in the Indian forex market.

The rush to develop a vaccine for the coronavirus will have a significant impact on the global economy because the recovery rate of a world system is essential for every country.


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