USDINR breaks back below 20-day moving average
US Dollar/Indian Rupee (USDINR) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDINR ended the month 0.63% higher at 75.0270 after losing 2700 pips (-0.36%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 75.0945, the currency confirmed its breakout through the previous session low after trading up to 1130 pips below it intraday.
Daily Candlestick Chart (USDINR as at May 29, 2020):
Friday's trading range has been 4445 pips (0.59%), that's slightly below the last trading month's daily average range of 5176 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for USDINR.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Bullish Hikkake Pattern showed up on March 31st, USDINR gained 2.00% on the following trading day.
Prices are trading close to the key technical support level at 74.7065 (S1). The FX pair closed back below the 20-day moving average at 75.1283 for the first time since May 21st.
Although the forex pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 75.5845 where further buy stops could get activated. Further selling might move prices lower should the market test April's nearby low at 73.9895.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for USD/INR. Out of 340 times, USDINR closed higher 55.00% 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 10 trading days, showing a win rate of 56.18% with an average market move of 0.24%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 0.48% and EURUSD closing 0.25% higher. On the flipside the worst performers have been USDCHF closing -0.28% lower and NZDUSD losing -0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been AUDJPY surging 0.62% and AUDNZD closing 0.57% higher. The worst performers of the day have been USDHUF tanking -1.08% and USDSEK closing -0.86% lower. Read more