Technical glimpse:

The breakdown in USD/INR continues with a renewed trending bias.

The break out above of the resistance 66.68 zone (Jan breakout/21DMA) highlights the importance of the upward targets.

Otherwise, December lows with violations confirming a deeper corrective phase upto 65.96 levels.

Upswings are healthy so far confirmed by both leading and lagging oscillators, (see daily charts for RSI, stochastic's positive convergence with price spikes and MACD's attempts of bullish crossover).

The pair has edged up higher upto 66.71 in early Asian session but failed to sustain at higher levels, currently hovering exactly at resistance 66.68.

These daily upswings raises caution for aggressive bears in monthly terms, thus it would be wiser to wait for confirmation from EMAs if it shows bearish crossover.

If RSI curve drags above, then it is a sign making higher highs even though month has just begun as it has tested supports at 66.9257 levels. You can probably observe the historic levels that resembles the same pattern and moved way above.

Option Trade Tips:

In FX option market for USDINR regulated by NSE, please be noted that the highest open interest is observed in OTM strikes calls (i.e. 67 levels) on NSE (National Stock Exchange).

Hence, we advise for trading purpose, avoid options with lower volumes and lower open interest.

USD/INR vol-adjusted carry has jumped back to pre-tapering levels.

So, dubious bulls on hedging grounds, earn carry through 1M USD put spreads.

Enter USD/INR put spreads that offer pre-taper tantrum levels of vol-adjusted carry.