USD/INR Analysis Today 07/05: Strong Resistance Zone (Chart)

(MENAFN- Daily Forex) Long Trade Idea

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of ₹84.22.
• Place the stop loss 15 pips below the local swing low.
• Adjust the stop loss to break even once the trade is 15 pips in profit by price.
• Take off 50% of the position as profit when the trade is 15 pips in profit by price and leave the remainder of the position to run.

Short Trade Ideas

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of the zone between ₹84.93 and ₹85.22, or ₹86.00.
• Place the stop loss 20 pips above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit by price.
• Take off 50% of the position as profit when the trade is 20 pips in profit by price and leave the remainder of the position to run.

The best method to identify a classic“price action reversal” is for an hourly candle to close, such as a pin bar , a doji , an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

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The USD/INR currency pair has been in a downwards trend over recent weeks, with the Indian Rupee gaining against the US Dollar just like many other currencies. The US Dollar gained against many currencies last week, but still looks relatively weak here, suggesting relative strength in the Rupee.

The Indian military strike on Pakistani territory a few hours does not seem to have affected the Rupee much.

Technically, we can see a weak suggestion of a bearish price channel which is helping to push the price down. However, the support level at ₹84.22 looks very strong, and if we see this level penetrated again followed by an immediate bullish bounce, that will look like a good long trade entry.

Another option could be short trade from a bearish reversal following an entry into the zone between ₹84.93 and ₹85.22 which has already been tested and held as resistance. This would be in line with the medium-term bearish trend so it could be a high probability trade. This resistance would also be confluent with the upper trend line of the price channel regression analysis, which could strengthen it, although this is probably not a very strongly valid price channel.

A short trade from the resistance level confluent with the round number at ₹86.00 might also be an interesting trade opportunity.

There is nothing of high importance scheduled today regarding the Indian Rupee. Concerning the US Dollar, there will be a meeting of the US Federal Reserve at 7pm London time.

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