- The US dollar fell a bit during the trading session on Wednesday, as we continue to see a lot of noise near the ₹83.25 level.
That being said, I think this is a situation where the market will continue to find plenty of buyers on dips, as the emerging market currencies continue to be a bit soft in general. At this juncture, you also have to keep in mind that people will start to pay close attention to whether or not the Federal Reserve will stay tighter for longer. There is a huge argument right now as to whether or not the Federal Reserve can maintain higher interest rates, and quite frankly I think at this point it’s becoming increasingly obvious that’s the only thing the market cares about.
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The ₹83.25 level seems to be important, and I think a lot of traders will continue to look at it as a short-term floor in the market. As long as we can say above this area, you can make an argument that we are in the midst of trying to build some type of base, from which to take off to the upside. It’s also probably worth noting that we have formed a couple of hammers previously, and of course that the 50-Day EMA currently sits in the same general vicinity. This of course is a very bullish sign of potential support if we can break above it.
Underneath, I see the 83 Rupee level is an area that could also be supported, especially considering that the 200-Day EMA sits there as well. Above, I look at the ₹83.55 level as significant potential resistance, and something that will have to be kept in the back of your mind as to whether or not we will continue to go higher. If we do, then the ₹83.75 level becomes something that people will pay close attention to.
As far as I can tell, this will remain a “buy on the dips” type of market, as long as we see plenty of desire to own the greenback. India of course is its own animal, and at this point it looks very much like we are going to continue to see a bit of softness in the rupee, as business conditions around the world may deteriorate.
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