From last couple of days, Markets are highly dominated by the Geopolitical jitters from Covid vaccine to US Election to Extremism in France. Sentiment is going into Risk – off mode as some major institutions and Investors are liquidating their positions from Risky assets. What we are noticing in USDINR is also a similar Price Behavior. Risks off Sentiment in the Markets are pushing the USD/INR Exchange rates higher and Prices have broken the long-standing Resistance zone at 73.90 – 74.00. Take a look at the Chart.
Price Action Analysis in USDINR
We can see a clear cut Breakout from the Resistance at 73.90 – 74.00. This breakout, I guess is a result of FII’s offsetting some of their positions from emerging markets and moving their capital into more stable countries such as US, UK and Europe – thereby converting the INR to USD and other foreign currencies. This Risk off position offsetting has temporarily pushed up the USDINR Exchange rates thereby creating the Breakout we see on the Price Action.
Will the prices go even higher? Well, now we can see a pullback in the Price action. It’s a momentum continuation pattern which means prices still have a tendency to go higher. But however, Volume is not so supportive of the Upside Movement and its consistently decreasing from last few days. Just keep an eye on the Pullback, I am expecting another upside move till 75.00, let’s see what happens.
