USDINR – Weekly Outlook & Analysis for 30th October 2021
USDINR Forecast & Technical Analysis for Forex
Introduction
There’s a good chance that we may see a prolonged bullish sentiment across the OlympTrade forex platform as we advance into Q4 ’21. India’s economy currently goes through a post-pandemic recovery phase.
India’s Fundamentals
The Indian rupee has been experiencing growth and progress in the last weeks as the government opens up its economic activities post COVID-19 wave after contracting 11% QoQ of June’s quarter reports by UBS-India activity indicator. According to the UBS projections, the Indian economy is to grow at 9.5% in FY22.
The hope is that by the time more people are vaccinated, the momentum will increase on cyclical tailwinds favoring external demands. The disruption of oil, shortages of domestic and high prices on global commodities affected the Indian fragile economy recovery process.
According to the report by UBS, 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 Indian, about 84% of the labor force work in an unorganized sector while a few percentages of the workforce are in an organized sector.
US Fundamentals
Unemployment Claims
The Federal Reserve members who are steering the country’s monetary policy consider unemployment as a key factor in their decision-making. Some analysis sees it as a lagging indicator because it is early data. The jobless claim focuses on individuals who are filling for the unemployment insurance scheme for the first time in a week.
They base the outcome on a weekly report about 7 days from when the previous report was released. The outcome correlates with the consumer’s spending and the labor market.
Forecast data is 290K while the previous was 290K.
USDINR Price Analysis
Monthly Chart Projection: Trades within correction area
Monthly Resistance Levels: 77.00, 75.60
Monthly Support Levels: 72.210, 72.940, 74.27
From the trading platform, we can see that the Bull’s momentum was slowed down when the price hits the resistance level of 75.60 on the monthly candlestick. The bullish surge increased after the price could take out the previous resistance level of 74.27.
The market structure is bullish as of now against the Indian rupee and we expect the trend to continue of the price can close above the area where it pulled back from. A failure to close above the region may likely reverse the trend to a downward trend.
Weekly Chart
Weekly Resistance Levels: 76.35, 75.66, 75.46
Weekly Support Levels: 72.35, 72.98, 74.71
The USDINR pair swing from the low of 72.35 has pushed the price higher towards the high of 75.66. you can see that the bullish momentum has been dull for some weeks because the price could not close above the zone despite the price reaching it 3 times. If the Bulls are going to control the market, they have to close above the resistance levels.
The weak US dollar has equally helped the Indian rupee from losing its value in the financial market as both countries are still struggling with the new variants of COVID-19 which led to poor economic activities in both countries. However, the close price above the high of 76.35 will bring in the online brokers to open long positions for the USDINR pair.
Looking at the weekly chart on the forex platform, you can see that the trading activities have been slow and it will take STRONG fundamental news to activate the Indian rupee.
Daily Projections: Breakout of Descending Triangle
Daily Resistance Levels: 75.39, 75.68, 75.000
Daily Support Levels: 73.55, 74.08, 74.65, 73.88
The Indian rupee lost the top to online brokers with long orders when the price broke out above the 73.88 levels. We got the bullish momentum from the 73.00 level after the US dollar suffer from poor economic data that was released some days back.
The price chart is showing a bullish flag and a close above the trend line from the top of the resistance connecting the lower highs will signal the online brokers that the trend is about to continue on the forex platform.
However, if you look at the forex platform, the bullish flag may change to a reversal of trend into a bearish trend, as you can notice a lower high and lower low pattern is developing on the daily chart.
Bullish Scenario:
The bullish online brokers have taken the USDINR pair to the top of 75.68 after dominating the market from the support level of 73.55. Traders with a long position will aim for a close above the resistance for the bullish run to continue.
Bearish Scenario:
The Indian rupee is showing some gains as it tries to push down the bull’s momentum. If the resistance can hold on to the daily time frame, we may see the price move in favor of the Indian rupees.
Conclusion and Projection
The USDINR pair favored the buyers with over 3.15% from the 73.36 support zone to the high of 75.68. If the Indian rupee can close below the support level of 74.08, we shall see the price drop lower.
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