The USDINR January
contract has been trading sideways since the start of December within a band of
54.50 to 55.60 levels. The market has recently turned bearish after posting a
high of 55.60 and currently trading above the crucial support of 54.50.If the
level is breached rates may form the second leg of correction and may decline
towards 53.70 levels which is almost 100% level of the first leg (the first leg
of correction was from 56.33 to 54.50).
The immediate trend
is bearish and prices are trading below the trend line resistance of 54.98
levels. As long as rates hold below the level we expect weakness to continue
and break below 54.50 could bring in fresh bearish momentum to the market. The
daily RSI is sliding and quoting around 0.40 levels suggesting the short term
bearish trend is alive. Prices are below the 100 day’s EMA which is pegged around
55.25.
Short term traders can look for selling the USDINR Jan
contract around 54.75-54.80 targeting 54.50 and add fresh selling for next
target of 54.00-53.70 with stop loss above 55.25.
