Despite the possibility of future rate cuts by the U.S. Federal Reserve, the dollar has remained extremely well bid, which is pushing INR lower against the USD, at a time, when the Indian exports to the United States have come under strain thanks to President Trump’s war on America’s trade deficit.
Last week, we warned our readers that the USD/INR rate could move higher as price action formed a bullish hammer candle, and the retail sentiment was signaling the possibility of a reversal.
Since then, the sentiment has shifted, and USD/INR has moved higher.
- Retail sentiment data from the USD/INR are largely used as a contrarian indicator since the retail sentiment tends to move in the opposite direction of the market.
- The most popular options market sentiment indicator is the put-call ratio (PCR). This week, the retail sentiment based on data from the National Stock Exchange (NSE) is signaling a reversal in the recent bearish trend in USD/INR. As of today, the PCR is at 1.09, suggesting retail positioning are more on the short side, which gives the pair a bullish bias.
- However, the sentiment has declined from 1.19 yesterday.
INR is currently trading at 69 per USD.
