- The US dollar has climbed again during the trading session on Tuesday against the Indian rupee, as we continue to threaten a major resistance barrier.
- The ₹83.75 level is an area that a lot of people need to pay close attention to, because it has acted as a ceiling in this market.
- With that being said, and the fact that we have the FOMC meeting on Wednesday also has a major influence on what’s going on with the US dollar and therefore I think you would need to be aware of the fact that there might be a bit of noise over the next 24 hours.
Underneath, we have the 50-Day EMA hanging around the ₹83.40 level, which sits above the ₹83.25 support level that has been so influential. After that, then you have the 200-Day EMA near the ₹83.10 level. In other words, there are a slew of potential support levels underneath that come into the picture to offer buying opportunities, assuming that we cannot break out to the upside in the USD/INR pair.
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General Safety?
It’s interesting to see that the US dollar is strengthening against the rupee, because quite frankly the Bank of India is well known to interfere in this market, and therefore it means that they probably have been defending their currency to one extent or another. Because of this, think you get a situation where the market is being manipulated, but it could get overrun.
Because of this, if we can close above the ₹83.75 level, then I think that the market really starts to take off to the upside and I probably goes looking to the ₹85 level rather quickly. At this point, I have no interest in shorting this pair, because quite frankly the geopolitical concerns around the world will continue to be favorable for the US dollar for safety and it does make a certain amount of sense that the Indian rupee might be shunned a bit, as it is an emerging market currency. With that being the case, and the fact that the Federal Reserve has remains stubbornly tight in the face of inflation means that the market will more likely than not continue to be one you buy on the dip, and of course buy on the break out.
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