USD/INR technical analysis: Key indicator has turned bullish for first since October

• USD/INR's weekly MACD has turned bullish for the first time in ten months
• The pair could soon test resistance at 71.82, courtesy of bullish technical setup and Yuan slide.

USD/INR has gained 2.2% so far this week and could rise further in the near future as a widely followed technical indicator is reporting bullish conditions for the first time in ten months.  

The moving average convergence divergence (MACD) histogram, an indicator used to identify trend change and gauge the trend strength, has crossed above zero on the weekly chart, confirming a bearish-to-bullish trend change.

The MCD's first bullish turn since October indicates the pullback from the October high of 74.48 bottomed out near 68.30 in July and the bulls have regained control.

The 14-week RSI has also crossed above 50.00, confirming the bullish view.

So, the pair looks set to test resistance at 71.82 (February 2019 high). Moreover, INR and other Asian currencies could continue to face bearish pressures with China allowing the Yuan to depreciate beyond 7 per US Dollar.

That said, a minor pullback may precede the rally to 71.82, as intraday charts are reporting overbought conditions. The pair closed at 71.23 on Wednesday. 

Weekly chart

Trend: Bullish

Pivot points