Currency Market Update: USD INR faces exhaustion

USD INR is currently consolidating in a downward channel. Breaching would lead to further bullishness in this pair. Read on to find out more. 

The October contract of USD INR witnessed an outstanding rally from 74.06 levels which extended to 75.69 levels. However, the pair seems to be exhausting near 75.69 levels and may likely retest its previous support near 74 levels. The exhaustion was well confirmed by the technical indicators like the Bollinger band which seems to be extended. Whereas, momentum indicator Relative Strength Index (RSI) has given a bearish crossover by trading lower than its 20-day Exponential Moving Average (EMA). 

Therefore, if the pair falls below 74.66 levels, then correction is likely to extend towards 74 levels. But a close above 75.69 levels likely indicate a change in trend, that might pull the pair towards 77.42 and higher.

On Friday, Mario Centeno who is a European Central Bank Governing Council member restated that based on all the analysis at its disposal, the monetary authority still considers the current rise in inflation a temporary phenomenon. At an event in Lisbon, he said, "The analysis is done with the information we have today, next month we will certainly have more information."

EUR INR pair is moving northwards making a series of higher highs and higher lows suggesting a sustained uptrend. However, it is facing resistance at 91 and 92 levels. 

Having said that, this pair has sprung back from the lower band of the Bollinger band indicating that the fall was mere a pullback. Moreover, two weeks back RSI had a positive crossover with its 20-week EMA. This suggests that the pullback might be over now. Today, it is hovering near its 20-week EMA of 46.

GBP INR had an excellent up move since July 2019. From April 2021 it has moved into a consolidation. It is presently trading at 103 and has resistance placed at 104 and 105 levels. On the downside, the support is placed at 99.60 and 98.73 levels.

However, the RSI is showing good strength as it has started to move up and is hovering above the 50 mark indicating bullish momentum going forward. Not just that, but it has a positive crossover with its 20-week EMA.