Indian rupee and Nifty 50 rise face key technical tests in the week ahead

The Indian rupee has been on the offensive against the US dollar since March. Now, USD/INR is facing its next key test to resume the near-term downtrend. A bullish Falling Wedge chart pattern seems to be brewing. A breakout above could open the door to extending the broader uptrend since 2021. This is as prices were unable to pierce through the 100-day Simple Moving Average.

Immediate resistance seems to be the 23.6% Fibonacci extension at 76.088, with the 38.2% level above at 76.584. Clearing the latter would then expose the all-time high at 77.159. In the event of a turn lower, immediate support seems to be the 100-day SMA. Falling under the latter exposes the February low at 74.36 before the current-year low comes into focus at 73.766.

USD/INR daily chart

Nifty 50 technical analysis

Unsurprisingly, accompanying gains in the rupee has been a push higher in India’s benchmark stock index, the Nifty 50. It is up over 13% since finding a bottom in early March, guided higher by a rising trendline from then. Now, the index faces its next key test, a falling trendline from October 2021. Confirming a breakout above the latter may open the door to extending gains to the all-time high.

Getting there entails clearing the current 2022 peak at 18350. Still, a breakout under the rising trendline risks opening the door to a turn lower. With that in mind, immediate support seems to be the 61.8% Fibonacci retracement at 17482 before the midpoint kicks in at 17136. Further losses would then open the door to revisiting the current 2022-year low at 15671.

Nifty 50 daily chart

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