USD/INR Pushing Below 62.9 With 62.25 In Sight

The rupee gained slight strength this morning, with USD/INR pushing lower from the 62.9 resistance, hitting a low of 62.63. The decline can be attributed to 2 major reasons- the weakness of USD due to the (really low) possibility of a US default following the debacle surrounding US debt ceiling, and technical bears driving prices lower.

Besides the 2 aforementioned factors, there are other minor drivers such as the spillover from the fall of USD/JPY dragging USD/INR lower. On top of that, Indian exporters have been spotted repatriating earnings today, shoring up Rupee. With all these factors, the likelihood of 62.9 holding increases. Price action agrees, trading lower currently following a re-test of the 62.9 resistance. This opens up a move towards 62.7 and potentially lower.

Hourly Chart
USD/INR Hourly" title="USD/INR Hourly" src="https://d1-invdn-com.akamaized.net/content/pic594c7a467e52426ce00065080454be74.PNG" height="324.19310344828" width="undefined">
From a technical perspective, should 62.7 is broken, the next level of significant support will be around 62.25. It is also likely that a break of 62.7 will result in Stoch levels pushing below 40.0, where an interim trough was spotted last Friday. With Stoch levels pushing below 40.0, the threat of a bullish cycle emerging becomes lesser and momentum will revert back towards the bearish side.

Weekly Chart
USD/INR Weekly Chart" title="USD/INR Weekly Chart" src="https://d1-invdn-com.akamaized.net/content/pice1d97b581cb443566dc77fc036b9a53b.PNG" height="324.19310344828" width="undefined">
Weekly Chart shows prices continuing to hold above the Channel Top. However, should short-term price push lower, we may see a proper breach into the rising Channel. Caution should be practiced though, as readings prices have pushed below the rising trendline twice in the past 2 weeks, only to see USD/INR bulls managing to rebuff the challenges. Similarly, though Stochastic readings are pointing lower, we are at the levels where a previous trough was seen (early May 2013). Hence traders should seek further confirmation before assuming that prices will push lower from here.

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