USD/INR Price Analysis: Positive Divergence ensures the strength of greenback bulls

• The RSI (14) has displayed exhaustion signs in the downside momentum.
• An unchallenged 200-EMA is still favoring the greenback bulls.
• The asset is poised to record all-time highs sooner.

The USD/INR pair is expected to gauge a strong rebound after a bearish Tuesday. A risk-on impulse in Tuesday’s session strengthened the Indian rupee and the asset dragged lower to near 77.30. The greenback bulls have not surrendered their dominance yet and are likely to make a powerful comeback.

The formation of a Positive Divergence on an hourly scale is indicating a continuation of an uptrend after a healthy correction. It is worth noting on the hourly chart that the asset made a higher low and is trying to rebound while the momentum oscillator, Relative Strength Index (RSI) (14) made a lower low and tumbled below 40.00. The exhaustion in the downside risk of the asset is expected to spurt a rally in the asset prices.

A slippage below the 50-period Exponential Moving Average (EMA) at 77.53 is displaying a short-term struggle for the asset. While the 200-EMA at 77.32 has yet not been challenged, which signals that the upside is intact. The primary trendline placed from April 5 low at 75.27, adjoining May 4 low at 76.00 will continue to act as major support for the counter.

Should the asset oversteps Wednesday’s high at 77.63, an upside move towards Tuesday’s high at 78.02 will be observed. A breach of the latter will drive the asset towards an all-time high at 78.30.

Alternatively, the Indian rupee bulls could extend their control if the asset drops below the 200-EMA at 77.32 decisively. An occurrence of the same will drag the asset towards the psychological support at 77.00, followed by April 28 high at 76.79.

USD/INR hourly chart