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USD to INR – Weekly Outlook ( July 26, 2018 )

Weekly Forecast for Indian Rupees

Introduction

The Indian Rupees has been in a consecutive streak of losing months traded against the U.S. dollar. With the recent global economic events taking place in the west and Asia, the pair has continued to sustain its bullish trend on the longer time frames.  We’ll be looking at the interesting events that are currently at play this week, and how they may affect the exchange rate of USD to INR.

Fundamentals events of the United State dollar and the Indian Rupees

Still in the news is the United States president, Donald Trump who happens to be in talks with the European Commission’s president, Jean-Claude Juncker, as they are said to have agreed to work towards removing all tariffs, subsidies, and trade barriers on non-auto industry goods. This meeting caused Asian markets to experience a mix in morning trades on the 26th. On the other hand, the DJI closed at 25,414.10 leading to a rise of about 172 points, while the NASDAQ and S&P 500 made gains of 1.2% and 0.9% respectively.

At the BRICS summit in Jo’Burg, the President of China Xi Jinping reinforced the negative impacts a trade war would have of its supporters, and how it favours nobody. He then urged members of the BRICS nations of which India is a part of, to reject protectionism and unilateralism

Technical Analysis

As a common practice, we’ll be adopting a multiple time frame analysis on the pair for a better understanding and timing of market entry and exits. We’ll start from the monthly chart and journey through the weekly, daily, 4-hourly and 2-hourly charts.

USDINR Monthly Chart

USD to INR Analysis - Indian Rupees - July 26 2018

If you’ve been following this series on the USDINR, you’ll agree with me that the above monthly chart has not changed much. As analyzed in our previous articles the Bullish hidden divergence pattern is followed by a series of consecutive closing bullish bars. The month of June signals a bullish accumulation phase, which we believe should propel the pair into new highs.

USDINR Weekly Chart

Following the Bullish regular divergence pattern formed on the 8th of January 2018 is a steadily growing bullish trend which shows the internal buildup of the monthly charts consecutive candles. The outside bar candlestick pattern thrusts the pair into huge gains for the U.S dollar consequently an increase in the USD to INR exchange rate.

USDINR Daily Chart: Bullish Divergence

At the daily timeframe perspective, we get closer into the meat and potatoes of the monthly timeframe, as the internal wave oscillations of the weekly chart are made visible.

4-Hour (H4) Time Frame

On the 4hour timeframe, here we get more choppy moves, as a result, we concentrate more on setups such as divergence patterns. Lucky for us there was one formed on the 17-07-2018 of last week.

2-Hour Time Frame

Finally, on the technical analysis, we consider the 2-hourly chart for a clearer entry, as it complements the 4-hour chart in identifying divergences through its oscillations. The divergence setups were on the 16th of this month, and most recently the 23rd of July. These moves should only be considered for short period moves as Indian brokers and traders alike use this time frame to take profit from its short swings.

Projection and Conclusion

Haven carried out both fundamental and technical analysis on the USDINR currency pair; we’ll conclude the pair to be in a somewhat rising range which is visible via the accumulation pattern of the weekly. However, a price close below the 68.346 support indicates a weakening of the Bull Run and a possible trend reversal.

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