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USD/INR likely to trade with positive bias, heading towards 71.75

In current week, traders can expect limited upside in the currency pair.

December 30, 2019 / 11:33 AM IST

Rudra Shares and Stock Brokers

In the week gone by, USD/INR currency pair closed with weekly gain of 0.395 paisa at 71.45 against the US dollar. Reiteration of buying interest was visible throughout the week and currency pair closed above the resistance area.

Bird's eye view suggested that prices are still locked in a broader trading range but the support level has shifted upward. The curve of short term moving averages has turned upwards and short term resistance level has been traded on an upside. Prices are trading above all major short term and medium term moving averages and suggesting that bullish bias should be maintained in an upcoming week. The downward sloping trend line resistance has also breached on an upside and currency pair is trading above its 20-Day Moving Average, suggesting that it can again go sideways with slightly positive bias.

Image130122019USD/INR DAILY (SPOT)

In current week, traders can expect limited upside in the currency pair. Daily RSI is trading in a sideways zone and declining ADX suggesting that trend is completely missing. The base for upcoming days has been shifted upward at 71.18 and gradually, we could see the prices moving towards 71.75 in days to come. Intraday charts are trading with fairly bullish momentum, RSI is trading in bullish trajectory and prices are tagging the upper band of the Bollinger band.

Trading Strategy

Considering the current setup where rangebound movement is expected with positive bias and base has shifted upward, traders can go for 'covered call' where long positions can be initiated in USD/INR futures at 71.58 and to hedge the positions, 2 calls of 71.75 can be sold at 0.040 of 3rd Jan contract.


Note: F&O prices derived on closing basis as on December 27, 2019

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol Contributor
first published: Dec 30, 2019 11:33 am

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