USD/INR Forecast Today- 22/05: USD Tests INR Support (Chart)
Date
5/22/2024 4:42:17 AM
(MENAFN- Daily Forex)
The US dollar fell a bit during the trading session on Tuesday, as we broke down toward the ₹83.20 level again. Ultimately, this is a market that has been consolidating for a while, and it does make a certain amount of sense that we remain choppy. In other words, I think that we don't have any real clear direction for a huge move, but the overall tendency for this pair is to rise over time.
This is mainly due to the fact that the central bank of India is very active in the currency markets , and essentially influence the exchange rate at will. Even if we were to break down below here, I think there's plenty of support underneath that a lot of people would be paying attention to. However, if we break higher the ₹83.50 level is an area that we need to pay close attention to as well, as it is significant resistance. In other words, this is a market that I think is going to continue to be noisy, and with that being the case, I think you need to be very patient with any trade you take.
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Consolidation After Move
At this point, I think we are just simply trying to work off the excess froth from the move at the end of February. Currently, the United States dollar is considered to be one of the more desirable currencies in the world, although we are starting to see some of the major currencies show signs of life. That being said, India is still considered to be an emerging market, so therefore I think you get a situation where the US dollar is probably more desired than the Indian rupee, simply due to the fact that there are so many geopolitical concerns right now, and of course we have the Federal Reserve out there with its tight monetary policy keeping the US dollar somewhat strong.
I believe at this point in time you continue to see traders jump into this market and by the dips, but I also think it's going to be difficult to break above the ₹83.75 level, an area that has been massive resistance recently.
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