USDINR: "Pawry" May Come to an End !

 Hello all!

I got many messages asking why I stopped updating views on the blog. I truly appreciate everyone's trust in my knowledge and their eagerness to learn. I was stuck in too much work and so I took a break from writing updates. But will start updating regularly again. 

Herein I share my observation on USDINR. 

Price Action:

An up trendline is made on the chart from the bottom of 2011 till now. Multiple times price has taken support on the same line in the past. Recent lows also took support on the same trendline, showing that the trend is still positive. 

A trendline made from the peak levels of 2018 shows good support at the same zone where the bottom was formed. The formation looks like a Falling wedge. 

A trendline connecting multiple highs of 2018-2020 also created a change in polarity, offering support to the price near lows. That inflection point was highlighted in my previous updates. 

The size of bullish candles near the support zone is very large, highlighting decisiveness in the action.  

100 EMA:

100 week's exponential moving average has offered support/resistance multiple times in the past and the recent bottom was also on the same zone, confirming the accuracy of average on USDINR and also confirming the positive trend on the price. 

ADX - DMI:

In the recent falling wedge formation, it is very clearly seen that price was making lower lows and negative DMI has formed lower lows too. This is considered as "Bullish divergence" and prices have shown a decisive bounce from the lows, confirming the observation. 

Ichimoku:

Price is taking resistance at the cloud. Future cloud is also bearish, suggesting that the trend is still negative and likely to remain negative in the near future (till it crosses the cloud). 

Putting it all together:

100 EMA and ADX-DMI indicators along with the longest trendline are suggesting that the uptrend on the price front is intact. Rs. 72 is certainly the Strong support zone. Falling wedge is a bullish formation but the breakout is certainly pending. The breakout zone is coinciding with the Ichimoku cloud resistance, suggesting that the uptrend may emerge on the breakout of the falling wedge. The zone to watch out for breakout is Rs. 73.75. Ine can expect a Bullish rally if prices break out of the formation. (kindly note that all the charts shared here are weekly charts and so one needs to wait for closing basis confirmation). 

Levels to watch out:

Support zone: 72

Resistance (breakout zone): 73.75

Cheers, 

Kunal 

Statutory Disclosure:

Kindly note that this update is only for educational purpose. 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.