Fawad Razaqzada
TradingCandles.com
Last year’s emerging market (EM) currency crisis saw the likes of the Turkish Lire (TRY) and Indian Rupee (INR) repeatedly drop to new all-time lows. While concerns have eased sharply over the past few months, the long-term trends on these developing currencies remain bearish. So, EM currency crisis could resurface again in the coming months, if investors unwind their bullish bets on these currencies and equities, after a very positive first quarter – especially for the INR.
In fact, the Indian Rupee has hit resistance today, causing the USD/INR to bounce sharply off a key long-term support area, ahead of tomorrow’s rate decision by the US Federal Reserve. As per the weekly chart, below, the area between 68.30 and 69.22 was a major resistance zone in the past, which could now offer support. Interestingly, we have seen a potential reversal already here: a bullish engulfing daily candlestick pattern (see inset). So, watch the USD/INR and other EM currency pairs closely to see if things develop further in the coming days. For now, this is merely a warning, but one that cannot be ignored.
Figure 1:
Source: TradingView and FOREX.com. Please note, this product is not available to US clients
Trading leveraged products such as FX, CFDs and Spread Bets carry a high level of risk which means you could lose your capital and is therefore not suitable for all investors. All of this website’s contents and information provided by Fawad Razaqzada elsewhere, such as on telegram and other social channels, including news, opinions, market analyses, trade ideas, trade signals or other information are solely provided as general market commentary and do not constitute a recommendation or investment advice. Please ensure you fully understand the risks involved by reading our disclaimer, terms and policies.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.