USD/INR Technical Analysis: Eyes new highs on oil rally and bull flag breakout

• Brent oil rallied to fresh highs since November 2014 in Asia, which is a net negative for a consumption-driven and oil importing economy like India, battling an already high current account deficit.
• The USD/INR’s 4-hourly chart shows a bull flag breakout, meaning the pair could rise to fresh record highs above 73.00. The relative strength index (RSI) on the hourly chart has also regained bull bias.

4-hour Chart

Spot Rate: 72.80

Daily High: 72.8375

Daily Low: 72.55

Trend: Bullish

Resistance

R1: 73.00 (psychological hurdle)

R2: 73.50 (127.2% Fib extension of the rally from January lows)

R3: 74.00 (psychological hurdle)

Support

S1: 72.55 (daily low)

S2: 72.38 (Sept. 27 low)

S3: 72.00 (psychological level)