- During the trading session on Wednesday, we initially gapped lower to kick off the session in India, but we saw buyers come in and try to pick up the market.
- By rallying, we threatened the area near 24,950 rupee but then broke back down.
- What this looks to me very much is a market that had rallied quite nicely from the lows, just like many other indices such as the NASDAQ 100, the FTSE 100, the ASX 200, and now is starting to try to sort out what to do next.
We have basically in most indices around the world wiped out the tariff war losses. India was already in trouble, so it’s a little bit different situation here. But when I look at this, it does look like a market that wants to go higher. Eventually, we have some sideways work to do working off some of that excess froth. And that brings us back to the other indices around the world as they do tend to move in the same direction in general, unless, of course, there is a specific problem with a specific country.
Support Below
Currently, it looks as if the 24,500 rupee level is major support, especially with the 50-day EMA sitting just below it. On the upside, we have the 25,250 rupee level offering resistance, so I think we’re going to continue to spend some time in this overall region. Once we get a significant candlestick break of one of these levels, then we follow.
To the upside, we have a potential move to 25,800 rupee, filling a gap on the charts going back to October of last year. On a drop, we could fill the gap going back to the end of May and find ourselves near the 24,000 rupee level, which coincidentally puts us within whisper distance of the 200 day EMA. So even that move may not change the ultimate directionality of the Indian exchange.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.