INRUSD closes below its opening price unable to hold early session gains
Indian Rupee/US Dollar (INRUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
INRUSD ended the month 0.67% higher at 0.013371 after losing 30 pips (-0.22%) today. Trading 30 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (INRUSD as at Jul 31, 2020):
Friday's trading range has been 70 pips (0.52%), that's below the last trading month's daily average range of 93 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for INRUSD. Prices continued to consolidate within a tight trading range between 0.013361 and 0.013431 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. In spite of a strong opening the pair closed below the previous day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 0.013351 (S1). INR/USD closed below the 20-day moving average at 0.013382 for the first time since June 24th. When this moving average was crossed below the last time on June 24th, INRUSD actually gained 0.36% on the following trading day. The currency was bought again around 0.013361 after having seen lows at 0.013368, 0.013365 and 0.013369 in the last three trading sessions. Obviously there is something going on at that level.
The FX pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to July's low at 0.013264, downside momentum could accelerate should the market mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for INR/USD. Out of 309 times, INRUSD closed higher 55.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after two trading days, showing a win rate of 56.96% with an average market move of 0.03%.