There are times when Technical analysis can collide with the on going fundamentals of an asset. Understanding the market sentiment or taking any trades can be big issues in such circumstances.
The present condition of USDINR reflects such a scenario.
On one hand, aggressive rate hikes by the FED are pushing the US Dollar to all-time highs. On the other hand, Price Action shows an Overextended Uptrend on the Chart. Take a look at the Price Action Outlook of USDINR on the 1D Chart
USDINR Price Action Trading Analysis on 1D Chart
From the beginning of January 2022, prices are in the Mark Up Phase. Buying pressure had a strong foothold on the currency prices.
Even right now, we can notice the rally going strong and trading closer to new highs at 80.00.
However, the major drawback is that trends don’t move in a straight line. We can see the overextended trend in the USD
Since USDINR is showing signs of an overextended trend, many of my readers and clients were asking me whether it’s the right time to short USDINR?
Their assumption can be validated based on Price Action and Technical Analysis. But the issue is, trading against strong fundamentals is quite risky.
The best course of action is to wait for a proper Price Action setup before taking any trade. To know what kind of setup we can expect on USDINR, take a look at the Video link given below. Traders and Investors should pay attention to the chart and take positions according to market behavior and Price Action
