The daily chart of USDINR is showing a double bottom pattern or “W” Pattern, which usually indicates a bullish reversal signal. The second bottom is already reached close to the territory of its first bottom; as long as a fresh USDINR low is not formed, there are chances of USDINR prices to go up in the near future.
USDINR pair found its support on the trend line (Red colored line). In July, we have noticed that price action took resistance several times, then in August prices succeeded in breaking that Trend line (Red line) while in the end of November the resistance gets converted into support and again the pair is trading close to that region. The Fibonacci retracement (Yellow structure) tool is used from the trough (64.7150) to peak (74.4850), which is indicating that current prices have already corrected to 50% of that rally. Now prices could move upside from this support level. On the other hand, momentum indicator RSI of 14 periods is at 37 which are near to oversold territory.
There are some fundamental factors which caused dollar-rupee pair to fall, a continuous slump in crude oil prices is one with broad dollar weakness against major currencies being another. Broader financial markets have been under pressure on worries about a global economic slowdown amid US-China trade disputes.
The crude oil prices have already fallen from a peak of $86.74 to $49.93 in a span of less than 3 months. Crude prices are unlikely to have a substantial downside. A decent correction in oil prices from the recent fall looks imminent. Once the oil prices start recovering, rupee could feel the pressure.
Forecast- Upside targets should be 71.50 and 72.50. Any close below 69.56 will negate the above view.