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Indian Rupee, Nifty 50 Forecast: USD/INR Sinks on US Election, Index Eyes Record High?

Indian Rupee, Nifty 50 Forecast: USD/INR Sinks on US Election, Index Eyes Record High?

2020-11-06 03:00:00
Daniel Dubrovsky, Analyst
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Indian Rupee, USD/INR, Nifty 50, US Election, Technical Analysis - Talking Points

  • Biden-win bets in US election propelling Indian Rupee, Nifty 50
  • USD/INR established key falling trendline, eyes September lows?
  • India’s benchmark stocks index eyeing all-time highs & beyond?
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Following some initial weakness, the Indian Rupee seems to be back on the offensive against the US Dollar. The Nifty 50, India’s benchmark stock index, is also gaining ground. This followed rising expectations of Joe Biden winning the US presidential election against incumbent Donald Trump.

In fact, emerging market assets have been benefiting from this scenario as it could mean less global trade friction in the coming 4 years. The MSCI Emerging Markets Index (EEM) recently soared to its highest since the first half of 2018. What is the technical road for USD/INR and the Nifty 50 from here?

Indian Rupee Technical Analysis

USD/INR turned lower after establishing what appears to be a new falling trendline from April. The pair may further break under short-term rising support from September as it re-enters a zone of consolidation between 74.04 and 72.76. Keep a close eye on the 50-day Simple Moving Average (SMA). Taking it out would open the door to testing the lower bound of the consolidative zone. Further losses from there exposes the 72.14 – 72.40 former resistance range. Otherwise, a climb above 74.91 exposes Summer 2020 highs.

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USD/INR Daily Chart

Indian Rupee, Nifty 50 Forecast: USD/INR Sinks on US Election, Index Eyes Record High?

USD/INR Chart Created in TradingView

Nifty 50 Technical Analysis

The Nifty 50 is fast approaching all-time highs set earlier this year, eyeing the 12246 – 12430 resistance zone. There is the presence of negative RSI divergence which shows fading upside momentum. That can at times precede a turn lower. In such an outcome, keep a close eye on the 50-day SMA which may reinstate the focus to the upside. Key support seems to sit between 11535 and 11661 towards September lows. Otherwise, taking out resistance exposes the midpoint and 61.8% Fibonacci extension at 12931 and 13437 respectively.

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Nifty 50 Daily Chart

Indian Rupee, Nifty 50 Forecast: USD/INR Sinks on US Election, Index Eyes Record High?

Nifty 50 Chart Created in TradingView

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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