- The US dollar against the Indian rupee continues to be very sideways and noisy, and quite frankly really hasn’t done anything.
- At this point in time, the ₹83 level above seems to be significant resistance, especially considering that it has been backed up by the 50-Day EMA.
- The 50-Day EMA is an indicator that a lot of people pay close attention to, and it has been somewhat reliable in this pair.
However, underneath we have the 200-Day EMA that will come into the picture as well, and that could be part of what drives this pair going forward. As we are stuck between the 2 moving averages, there isn’t a whole lot to get excited about right now, it is probably worth noting that the central bank in India will quite often keep this pair in a rather tight range. I don’t see that changing, as the Indians prefer to have a very stable exchange rate.
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With that being said, if we were to break out of this little area it could be the beginning of something bigger, but right now a lot of this comes down to global growth or perhaps even the lack of global growth and a significant amount of concern when it comes to whether or not demand will pick up. Remember, India is one of the biggest emerging markets, so a lot of people will be looking at it through that prism. Because of this, I think that we have a somewhat sideways market just waiting to happen but it is worth noting that there have been several wicks that extended from the candlesticks.
If we break down below the 200-Day EMA, then it’s possible that the US dollar really starts to unwind. I don’t know how far it could go, because this is not a freely traded currency pair in the sense that most others are. There is a lot of central bank interference, and I just don’t see how that changes anytime soon.
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