USDINR: Will it stop sliding further ?

Hello all, 

herein I share my positional technical observation on the weekly chart of USDINR. 

Price Action:

After the massive decline in prices from the peak of 77 zones, the price has taken the support of the 2 years old long term trendline last week. Doji is seen right onto the trendline, highlighting a likely pause in the downtrend. The rising wedge pattern seems to be unfolding, where the last leg of uptick remains pending. 

Moving Average:

On the weekly chart of USDINR, using the trial and error method, it is seen that 75 period's EMA offers the best support and resistance. Being an average, certainly few whipsaws are seen. But this seems to be the best moving average as per the past price behavior with respect to the support and resistance. Presently, the price took support on the same moving average, which is coinciding with the trendline support. 

RSI:

There are 2 main observations on the RSI front. 

The overbought and the oversold zone is rearranged as per the past behavior. It is seen that recent prices pushed the RSI near that support (oversold zone) of 35 levels. In the past, prices showed decent reversal after RSI reaching this zone. 

The second thing to notice here is that the prices are making higher lows and RSI is making lower lows, taking good support of the downward sloping trendline. This seems to be forming a hidden bullish divergence. Though a divergence doesn't offer any trade as such, but it certainly serves the purpose of being cautious about the ongoing (down) trend. 

Ichimoku:

Here are again multiple points to notice. 

Tenkan sen has crossed Kijun sen on the lower side, but Kijun sen is still flat. So this can be a minor correction of the ongoing major rally and there seems a bright possibility of the main trend continuation. 

The present Kumo cloud seems to have offered the best support to the declining price. 

The future Kumo cloud is still bullish with upward-sloping Span A and slat Span B. This offers the ray of hope for the trend continuation. 

Chikou span is within the price action, confirming likely consolidation of price action before new / continuation of the rally. 

To sum up the whole indicator outcome, there is a bright possibility of a sideways move, followed by the potential trend reversal (from the recent downside to the upside). 

Putting it all together:

Doji candle followed by the bullish candle (ongoing weekly candle), right onto the two years trendline support and 75 periods' EMA, strong RSI (based on oversold region), and hidden bullish divergence along with all bullish signs from Ichimoku is creating a reliable bullish environment for the price action from hereon. One needs to remember that observation is on the weekly chart and so view remains positional. 

Cheers, 

Kunal 

Statutory Disclosure:

Kindly note that this update is only for educational purposes. It is safe to assume that my personal position, my fund's position, and my client's, as well as relative's position, maybe open in the counter. Kindly prefer to take the advice of your financial advisor before initiating any position. Prefer to keep the risk-reward ratio in mind based on personal temperament, risk appetite, and financial background.