Analysis Of U.S Dollar/Indian Rupee
It is a simple analysis that helps you to understand the situation of the U.S Dollar/Indian Rupee over the past 7 years. This analysis is based on data that is available on the internet. Officially in 1993, Indian Rupee is announced as a free-floating currency. Until then the Indian rupee is fully controlled by RBI (Reserve Bank Of India), in which the Indian government pays in billion to keep Indian Rupee stronger in that the foreign reserve decreased. Because of that Indian government announce Indian Rupee as a free-floating currency. At that time (1993) the price of the Indian Rupee in exchange with the U.S Dollar is 30 Rupee = 1 Dollar. Currently, the rate of the Indian Rupee in exchange for the U.S Dollar is 82.5250 Rupee = 1 Dollar. Generally, in the currency market, the moment and volatility are much lower than Equity Market because here no one can operate the currency like stocks. Demand and Supply of currency decide their rate like if the U.S demand the Indian Rupee in exchange for U.S Dollar then the rate of the Indian Rupee increase in the exchange for the U.S Dollar, but currently the scenario is Vice-Versa. India demands U.S Dollar because foreign trade is only possible with U.S Dollar, so it is a necessity.
This year is normal which means any special event does not happen this year that affects the currency of India and the U.S. So, the 1st-month candle forms a little bearish candle and the 2nd month’s candle is also bearish. Two consecutive months are bearish because currency faces resistance at the price level of 63.2 but the 3rd-month candle is a bullish pin bar candle which also indicates a new bullish trend. The 4th month forms a strong bullish candle which covers the 1st and 2nd-month candle, but as mentioned there is resistance so the 5th, 6th, and 7th face resistance and form Doji Candle. But this time bullish trend started that’s why in 8th-month price breaks the resistance and forms a big bullish candle. After that in the remaining four months, the price can’t able to break the high of the 8th month and for that four-month, the market goes sideways and remains to consolidate in the price zone of 65.3 to 66.5.
As the bullish trend still exists, so again the 1st month of 2016 breaks the high of the 8th month of 2015 which proves the existence of a bullish trend. The 2nd-month candle forms a Bullish Doji candle because the price again faces resistance from the candles of the year 2013 and that resistance is very strong that the price fall in 3rd month. If the price fall that much it can cover almost 1st and 2nd-month candle because of strong resistance. 4th month forms a Doji candle and after that, the volume decrease, and the price enables to break the candle which is formed in 3rd month. In 4th, 5th, 6th, 7th, 8th, 9th, and 10th remain consolidating in the price level of 66.3 to 67.6. The last two months have an important role in further years moment, in the 11th month forms a bullish candle which again reaches that level and the next month forms a bearish candle. So the price again faces resistance at that same level, but at the same time, a pattern formed in that year is double top which indicates the bearish moment in the next year.
As a double-top pattern is formed there is a high chance of a downward moment. The 1st month forms a bearish candle which proves the double-top pattern. The next four months consecutive falls by 6% which is too much in the currency market. In 2nd month a bearish candle forms, in 3rd month a strong bearish candle forms, and in 4th month again bearish candle forms. After a continuous fall for 5 months, the price consolidates for 4 months. 5th and 6th month forms a Doji candle which indicates the sideways moment. The 7th and 8th months also form bearish Doji candles. But in the 9th month instead of the bearish moment a strong bullish candle formed and in the last 3 months a small bearish candle formed. In total, this year’s price falls by 7% but in the end, the price takes support from the previous resistance. This resistance which faces in 1st month of 2015 that becomes support now.
As we see price takes support from the previous resistance, so there is a chance of a bullish moment. The 1st month forms a bearish candle but still is in the support level of 63.1 to 64.1 rupee. In 2nd month a strong bullish candle forms because of the support level and 3rd month forms a perfect bullish pin bar candle which increases the trust of the support level. After a strong moment toward bullish, in the 4th month again a bullish candle forms and this same happens in the 5th, 6th, 7th, 8th, 9th, and in 10th month. The currency grows by 16% in just 8 months which is incredible. In the 7th month, the price forms a hanging man candle pattern which indicates the consolidation and sideways, which is necessary for a strong momentum. The price forms a new high of 74 in the 10th month, but due to any external reason price again falls in the 11th month by 6% which forms a strong bearish candle. In the 12th month the bearish pin bar candle forms under the influence of the bearish candle of the 11th month.
In this analysis, the meaning of an Upward moment and a Bullish Moment is the value of the Indian Rupee is decreasing compare to U.S Dollar. The meaning of Bearish Moment and Downside Moment means the value of the Indian Rupee is increasing compared to the U.S Dollar
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