USD/INR: Rupee likely to extend Tuesday's rally
|- USD/INR is likely to trade on the defensive, having formed a bearish Marubozu candle on Wednesday.
- The pair could drop to key Fibonacci support at 71.19.
Indian Rupee is likely to remain better bid on Wednesday, according to technical charts. The uptick in China's Yuan could also bode well for the Indian currency.
The USD/INR pair created a bearish Marubozu candle on Monday, which comprises of long body and little or no shadows. Put simply, it indicates the sellers remained in control from the opening bell to the close of the day and is considered very bearish.
The bearish cross of the 5- and 10-day moving averages also indicates the path of least resistance is to the downside.
Further, Chin's Yuan is gaining ground against the greenback and could help the INR and other Asian currencies eke out gains. At press time, the USD/CNY pair is trading at 7.02, representing a 0.10% decline on the day. Yuan looks set to extend gains to 6.95.
All-in-all, the pair looks set to test 71.19 (61.8% Fib R of 70.5490/72.24) in the short-term.
The decline, however, may not happen immediately if the technical correction in Indian equities gathers pace. The S&P BSE Sensex, India's benchmark equity index fell by 68 points on Tuesday on profit-taking, having rallied from 37,415 in a near-90 degree manner in the last six weeks.
Risk aversion in global equities cannot be ruled out, as China's industrial profits tanked 9.9% in October from a year earlier, the official data released at 0130 GMT.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.