USD/INR: Trend Down?
In many ways, this Monthly Chart above is by far the most interesting I've had to look at till now. It has many, many of the characteristics of a market that is finishing its current (Bullish) cycle and looking about for other action. Some things have been determined, or just about to, for example the target for the recent Double Top has just about been achieved. Others are still nascent, notably the potential for a H+S Top with a Double Top as the Crown. It is still too early to say but with the efforts since mid-year to try to penetrate the recent 50% Fib at 63.57 it is a very likely scenario for a move lower as we have closed the lowest on the Monthly Chart since May 2015. The fly in the ointment is the 5 Year MA (currently 63.28) which is rapidly approaching from below as support.
This MA has form as support because if you look back to 2010 - 2012 you will see how it acted as a support band within and under the major part of the market at the time for the early part of the multiyear move up. So - the thing to watch out for is two, ideally three consecutive monthly closes below the 5 Year MA...AND the same under the recent 50% Fib. If that happens then the likely move would be a possible 2 n d Shoulder for the H+S Top or down to the 58.25 area before a move back up. Consecutive closes over the 3 Year MA (currently 65.45) would likely negate that as we would also be over the 2016-to-date Downtrend (currently 65.02) and would jeopardise the mid 2017 high at 65.89 as next resistance. If that level goes then the 68.88 high will likely be in play. On balance with two MAs pointing upwards, two down but one of those flatlining soon, I'll put a Mildly Bearish bullet point above.
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