There’s a lot going on in the world right now, and India specifically, but one positive to come out of all this mess is we may be seeing a more clear trend develop in USD/INR.
Let’s take a look at what’s happening.
USD/INR corrected nearly 10% since October and has been trying to find its footing at its former highs near 69. Despite the choppiness on the daily timeframe, on the weekly chart momentum did not get oversold during this corrective period and is now turning higher as prices break out above the downtrend line from those October highs.
Click on chart to enlarge view.
This gap could potentially be the catalyst that reignites this long-term uptrend and pushes USD/INR towards its long-term price objective near 80 over the next year or so.
If this truly is a runaway gap, we should see additional upside follow-through without much, or any, of the gap being filled. Regardless, if prices are above the recent lows of 68.30, the bias is very much to the upside and we need to be buying any weakness.
Rupee weakness will continue to affect Commodities, so we just wrote a premium post for members updating our views on a few key movers.
Thanks for reading and let us know if you have any questions!