USDINR – Weekly Outlook for March 14 2019
USDINR : Weekly Technical Analysis for Forex
Last week, the USDINR closed with a long bearish candle, indicating a strengthening of the Indian Rupee. Welcome to another week where we analyze the fundamental and technical events that are responsible for the trend direction of the exchange rates. Should we be looking forward to a continuation of last week’s bearish move? Let’s find out.
India’s Trade Deficit
India’s Ministry of Commerce and Industry published the number of imports weighted against the total goods and services. The actual value came out as $14.73 billion which is the same as the previously released value. The consensus was projected as $14.3 billion which is less than the actual result. This is negative for the Indian Rupee as the high value indicates an increase in the trade deficit.
India’s FX Reserves in USD
On Friday 15th March ’19, the Reserve Bank of India will be releasing the FX Reserves. This reflects the value of foreign security earnings, Central Bank sales of foreign exchange, and transactions with official oversea institutions.
The last value for the FX Reserve was at $401.78 billion. An actual value higher than expected is generally interpreted as bullish for the Indian Rupee, and bearish for a low reading.
United States Fundamentals
US CPI – Consumer Price Index Ex Food & Energy
The US Department of Labor Statistics released the CPI which measures price movements by comparing retail prices of a basket of goods and services. For accurate calculations, volatile products like food and energy are excluded.
The actual reading came out as 0.1% which is bearish for the USD based on a previous reading of 0.2%.
USDINR: Weekly Chart
The weekly chart started off by triggering bearish pressure on 05 November ’18 for a 4.0% gain in favor of the Indian Rupee. Following the price decline, the pair entered into a cycle of alternating high and low swings triggered by bullish and bearish engulfing patterns on 03 December ’18, 17 December ’18, and 07 January ’19. Finally, a breakdown of hidden bullish accumulation sends the pair into a current bear swing.
USDINR Daily Chart
Approaching the pair from a 4hour chart perspective, we observe rejection of bullish activities on 07 February, 19 February, and 28 February ’19. These three levels established resistance levels at 71.92, 71.62, and 71.510 respectively. The last rejected bullish pressure further resulted in a failure of support levels at 70.787, and 70.323.
USDINR 4-Hour (H4) Chart
As the daily chart, the 4hour chart shows rejection of bullish pressures on 04 March ’19 02:00, 05 March ’19 02:00, 05 March ’19 18:00 and 08 March ’19 02:00. These levels setup resistance at 71.012, 70.971, 70.204, 70.022, and 69.842 respectively.
USDINR 2-Hour (H4) Chart
On Binomo platform, one major forex brokers, the 2hour chart also shows rejection of bullish pressure, and a follow up of bearish pressure as shown on the chart above. The triple bullish accumulation failed on 28 February ’19 in combination with a double bearish accumulation.
Conclusion and Projection
At press time, the 4hour chart signals a breakout of bearish pressure, in combination with a bullish regular divergence, signaling a bullish recovery for the USD. By this, we expect an upward movement of the exchange rate towards the 70.21 and 70.639 resistance levels.