The US dollar initially tried to rally against Indian rupee on Good Friday but struggled a bit as we pulled back from the INR76.50 level. The resulting shooting star suggests that we are running out of momentum and could turn right back around to reach the INR76 level. The size of the candlestick is rather interesting, and it is in an area where we have seen a lot of trouble previously. Ultimately, the US dollar will continue to see a little bit of hesitation, and the USD/INR pair tends to be rather choppy.
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If we were to break above the top of the shooting star, then the market could very well go looking to the recent highs at the INR77 level. That obviously would be a very pro-US dollar, perhaps in a major “risk-off move.” Looking at this chart, we certainly made a significant attempt to break out, but could not quite do so. Because of this, the market continues to see a lot of choppy volatility and considering that the Indian rupee is generally very messy, that is not a huge surprise.
The 50-day EMA is currently at the INR75.75 level and rising. The market is going to pay attention to that indicator as a potential support level. The market also has the INR75.50 level underneath there offering support as well. Keep in mind that India is considered to be an emerging market currency, so it needs risk appetite to strengthen. If we continue to see a lot of concern around the world, it does make sense that we would see the US dollar pick up a bit of attention.
As the US dollar is considered to be a safe currency, and India is an area of explosive growth, it will come down to risk appetite globally that will have the biggest influence on this market. As Friday was Good Friday, liquidity may have been a bit of an issue as well, so I think it is probably a bit much to think that this market has stated something during the day. Ultimately, this is a market that continues to see a lot of chop, but that is going to be the case with most Forex markets. At this point, it looks like we could pull back a bit.