USDINR breaks above 20-day moving average for the first time since June 24th
US Dollar/Indian Rupee (USDINR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDINR ended the month -0.67% lower at 74.7880 after gaining 1680 pips (0.23%) today. Trading up to 1660 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDINR as at Jul 31, 2020):
Friday's trading range has been 3900 pips (0.52%), that's below the last trading month's daily average range of 5182 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 USDINR. Prices continued to consolidate within a tight trading range between 74.2755 and 74.8440 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. In spite of a weak opening the FX pair managed to close above the previous day's open and close, forming a bullish Engulfing Candle.
The currency managed to close above the 20-day moving average at 74.7279 for the first time since June 24th. When this moving average was crossed above the last time on June 24th, USDINR actually lost -0.36% on the following trading day. Prices are trading close to the key technical resistance level at 74.8995 (R1). USD/INR was sold again around 74.8440 after having seen highs at 74.8030, 74.8225 and 74.7990 in the last three trading sessions. Obviously there is something going on at that level.
The pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
As prices are trading close to July's high at 75.3905, upside momentum might accelerate should the market mark new highs 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) above 80" stand out. Its common bearish interpretation has been confirmed for USD/INR. Out of 310 times, USDINR closed lower 56.13% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 57.74% with an average market move of -0.02%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more