USD/INR Technical Analysis: Drop to two-month rising trendline likely

• The USD/INR charted a bearish outside-day last Thursday, signaling a temporary bullish exhaustion. The negative follow-through on Friday confirmed a bearish reversal.
• The relative strength index (RSI) charted a lower high in response to higher high in the USD/INR, meaning the indicator has diverged in favor of the bears.
• The MACD produced a bearish crossover on Friday and is now signaling that the bearish momentum is about to gather pace.
• As a result, the gains in the USD/INR seen today could be short-lived. The pair could drop to support of the rising trendline from the August low, currently seen at 73.38. A daily close below that level would allow a deeper pullback to 72.00-71.52 (Sept. 14 low).

Daily Chart

Spot Rate: 73.88

Daily High: 73.95

Daily Low: 73.625

Trend: Bearish

Resistance

R1: 74.00 (psychological level)

R2: 74.24 (resistance of Oct. 5 high as per the hourly chart)

R3: 74.48 (Oct. 11 high)

Support

S1: 73.55 (200-hour exponential moving average)

S2: 73.38 (rising trendline support)

S3: 73.00 (psychological support)