USDINR – Weekly Outlook & Analysis for 25th Feb 2022
USDINR Forecast & Technical Analysis for Forex
Traders’ sentiment is neutral on the OlympTrade trading platform as we can see the price around the opening price of the month. The previous trading week saw the dominance of the sellers, if the seller’s sentiment continues, we may see the price close below the psychological zone.
The Indian rupee growth continued last week when the currency made some gains against the US dollar. A report from SBI says that the Indian GDP is likely to grow at about 5.8% during the third quarter of the fiscal year 2022. As of the second quarter of 2021-22 the economy expanded by 8.3% to cross above the pre-pandemic zones. We saw a slower growth as of July-September period lower than 20% expansion.
The office of the National Statistical (NSO) will announce the GDP estimate for the third quarter fiscal year 2021-22 on 28 February 2022. Some reports say that the domestic economic activity is still below the pre-pandemic levels as private consumption is low.
Other factors like the domestic air traffic were weakened as a result of the Omicron variant which affected the urban demand indicator showing a decline in passage vehicle sales and consumer durables during the Q3.
Following the UBS report, the Indian labor force is not organized as that of the developed economy. In a developed economy, a higher number of people work in the formal sector and their levels of income were maintained during the covid-19 crisis. However, for a developing economy like India, about 84% of the labor force work in an unorganized sector while a few percentages of the workforce are in an organized sector.
CORE PCE PRICE INDEX m/m
The Consumer Price Index tells a lot about the economic health of the country because it gives insight into the behavior of consumers when it comes to spending. The Personal Consumption Expenditures focuses on the services and goods consumed by individuals.
The Federal Reserve seems to use the outcome as an inflation measure according to some analysts. The measurement excludes the consumption of energy and food, and it is released 30 days when the month ends.
An outcome lower than the actual is not suitable for the currency, but an outcome higher than the forecast is good for the US dollar. Forecast data is 5% while the previous was 5%.
USDINR Price Analysis
Monthly Chart Projection: Trades within correction area
Monthly Resistance Levels: 77.00, 76.44, 75.73
Monthly Support Levels: 72.33, 72.98, 74.43.
Last month candlestick closed in a Doji pattern on the trading platform, you can tell that the trading activities ended in a natural formation. The 76.44 resistance zones have slowed down the bullish surge that rose from the low of 72.98.
Looking at the monthly chart you can see that the price hits the resistance level of 75.73 on the February monthly candlestick before the rejection of the price on the USDINR pair. It is obvious that the market is full of uncertainty and it has no clear direction since the price is currently around the area it opened at the beginning of the month.
Weekly Resistance Levels: 76.4400, 75.7210.
Weekly Support Levels: 73.7660, 72.9822, 74.4300
The USDINR pair saw the weekly candle of 14 February closed in a bearish note. The Bears dominated the market and if the bearish momentum is sustained the trading week may see the bears close below the current support zone. The Indian rupee is likely going to react to the steps taken by online brokers and investors as they sold off riskier assets as the news on US inflation is on red alert.
An analyst from the Bank of America suggested that the emerging markets should focus on helping the domestic demand recover from the effect of COVID-19 amidst the modest inflation rates rather than locking steps with the Fed.
Daily Projections: Breakout of Descending Triangle
Daily Resistance Levels: 75.39, 75.72, 76.44
Daily Support Levels: 74.557, 74.23, 73.74
Online brokers have seen the Indian rupee make about 1.70% gain against the US dollar from the resistance level of 75.72 when the price moved to the south on the forex platform. The price of the currency pair is sitting on a support zone (74.23) which is important to online brokers and other investors.
The daily chart shows that the price is on the neckline, a close below the support zone will shift the focus of the online brokers from an uptrend to a downtrend on the forex platform.
If the support zone is rejecting the price, the level may reverse the direction of the trend for the price to retest the resistance level of 75.72 for either a breakout above or to be rejected.
The bullish online brokers who are long on the USDINR pair will hope for a rejection of the price around the support level of 74.23. If the rejection holds the price will rise towards the resistance level of 75.72 for the bullish run to continue.
The trading week started by favoring the Indian rupee, if the price can breakout below the zone the sellers take the price lower to 73.75 zones. However, if the support level holds on to the daily time frame, we may see the price move in against the Indian rupee.
Conclusion and Projection
The USDINR pair may continue the bearish trend if it can close below the support level of 74.23 Most Asian currencies are trading with caution ahead of the US inflation data and the tightening of the monetary policy.
The market has its uncertainty therefore, online brokers can wait for clarity before deciding to make a profitable gain on the forex platform.