Indian Rupee Gaining Strength

Starting with the most favourite of them all- USDINR. In late February, we had seen USDINR move towards levels of 72.20 and bounce back immediately to move towards its resistance at 74.50. While that gave an idea of short-term weakness in the rupee, we are now back to those lows close to 72.20 as Rupee continues to display resilience against the greenback.

The currency pair has struggled to move higher since the correction began in April 2020. The trend as we see it is still moving lower. What we will be looking for going forward is whether or not the strong support of 72.20 holds its ground. As can be seen, this level has a strong price memory, so movement around such levels becomes really interesting to track. In the event that 72.20 is breached, the next important level to track would be 70.50.

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[show_to accesslevel="premium-india"]Up next we have the EURINR pair. This currency pair was displaying some strength moving past the resistance at 87 but could not sustain those higher levels. As the price rolled over, it has now reached an important zone. While the indicator has declined more rapidly, the price is well on its way to move lower.

A move below 86 can take the price much lower towards 82, prolonging the weakness in the Euro and subsequent strength in the Rupee. The long-term resistance at 87 has prevented the currency pair from rocketing towards 101.

Is this an interim correction or will this continue for longer? We'll have to wait to find out.

JPYINR is a great example of textbook patterns playing out. We saw a very narrow consolidation in this currency pair right up against its resistance of 0.72 and we were keeping a close eye on this one to see the direction of the breakout. From narrow consolidations come explosive breakouts! Well, we can definitely see that here.

The price has now moved out of that one-year consolidation, breaking down and resulting in a swift move towards 0.67. This is where things become more interesting. The indicator has moved into bearish territory for the first time in six years! This is only alluding to the extent of weakness that is at play in JPYINR. The next level to track is 0.62.

GBPINR too has corrected from highs clocked in late February. While 104 continues to be a long-term resistance level, the quick descent from sub-104 levels in late February indicates the lack of strength in the currency pair to hold on to those higher levels for more than a couple of trading sessions. Although the indicator has moved close to bearish territory, it is still lingering above it.

We're tracking the level of 99.50 to see if this zone provides any support in the weeks ahead. In the event that the price moves below this level, the next level to track would be 97.

Over the past few days, we've noticed the strength building in the Indian Rupee against its currency pairs and this can be seen across the board. Since we were observing this space for any indication of strength or weakness, looks like the Rupee strengthening and maintaining that stance could be an important trend to track.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team