USD/INR Price Analysis: Tests breakout of Descending Triangle around 82.70
|- USD/INR is displaying wild moves as investors are discounting the impact of the release of the overnight FOMC minutes.
- Fed policymakers are favoring the continuation of policy tightening to avoid fears of a recovery in US inflation.
- The asset is testing the breakout of the Descending Triangle chart pattern around 82.70.
The USD/INR pair is displaying wild moves in the opening session as investors are discounting the impact of the release of the hawkish Federal Open Market Committee (FOMC) minutes.
According to the FOMC minutes, Federal Reserve (Fed) policymakers were loud and clear that a strong labor market and upbeat January Monthly Sales are posing a threat of pause in the declining trend of the United States Consumer Price Index (CPI). Therefore, the Fed should reach to terminal rate to bring down inflation to the 2% target.
The US Dollar Index (DXY) has dropped to near 104.00 after printing a three-day high of 104.20 as the risk aversion theme has eased. S&P500 futures have added significant gains in the Asian session, portraying a sheer recovery in the risk appetite of the market participants.
USD/INR is testing the breakout of the Descending Triangle chart pattern on an hourly scale. A breakout of the aforementioned chart pattern results in a volatility expansion after a sheer contraction. The downward-sloping trendline of the triangle is plotted from February 14 high at 83.04 while the horizontal support is placed from February 14 low at 82.57.
The mighty 200-period Exponential Moving Average (EMA) at 82.73 is providing support to the US Dollar bulls.
Meanwhile, the Relative Strength Index (RSI) (14) is looking for a cushion around 40.00 after a healthy correction.
Should the asset break above February 22 high at around 83.00, US Dollar bulls will drive the asset toward October 23 high at 83.29. A breach of the latter will expose the asset to unchartered territory. The asset might find further resistance around 83.50, being a round-level number.
On the flip side, a break below February 14 low at 82.57 will drag the asset toward February 10 low at 82.33 followed by January 31 high at 82.07.
USD/INR hourly chart
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