USD/INR Forecast Today - 05/03: Rupee Sideways Trend (Chart)
(MENAFN- Daily Forex)
The US dollar continues to hang about the same area against the Indian rupee as we just don't have much in the way of momentum.
We are looking at the 50-day EMA sitting just below and of course the 200-day EMA sitting just above. The current trading area right around the 83 rupee level seems to be essentially where the
market is comfortable at the moment. Whether or not it stays there remains to be seen but clearly at this point we could have a scenario where traders will continue to try and get involved on each and every dip as it does give them the opportunity to pick up a little bit of value in the greenback.
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Keep in mind that the Bank of India is heavily involved in this market so it's not like it's a free floating market to begin with. Because of this you have to be abreast of any serious changes in attitude and that might be difficult. That being said it certainly looks to me like it's a market where traders continue to favor the greenback longer term but at the same time, they also recognize that there are potential rate cuts coming from the United States. In other words, I think it'll be interesting to see what the Bank of India does when it comes to combating a potentially weakening US dollar. I don't think they have to worry about it right this second but clearly you have a scenario where we could see a big fight on our hands given enough time. At this point though I think you just see more sideways lackluster trading.
With this being said, you can use this currency pair to get an idea as to how the US dollar may perform again some other emerging market currencies , but to trade this market takes a lot of patience as it is very much like trading the bond markets in the United States, as they typically don't do much during the day. With that, I remain very neutral in this pair and think that we have a long way to go before traders really start to put money to work.
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