USD/INR Technical Analysis: 100-day MA is key resistance

The USD/INR pair closed at 71.44 on Feb. 1, confirming a bull flag breakout. The 100-day moving average (MA), however, has put the brakes on the post-breakout rally.

Daily chart

The back-to-back failure to penetrate the 100-day MA on a closing basis is a slight cause for concern. The outlook, however, remains bullish while the pair is held above the former resistance-turned-support of 71.38 (Jan. 29 high).

With 5- and 10-day moving averages (MAs) trending north, dips to 71.38, if any, could be short-lived.

A close above the 100-day MA of 71.78 would bolster the already bullish setup and open up upside toward 72.55. Note that the 14-day RSI is located at 58, meaning there is sufficient room for a convincing move above 72.00.

India' Nifty index has found acceptance above the crucial resistance of 11,000. The stocks, therefore, could remain better bid, providing some support to INR.

Trend: cautiously bullish