Dollar-Rupee Rally Stalls at Fibonacci Target as Bulls Eye Confluence Support
USD/INR slipped from fresh record highs after briefly testing a 161.8% Fibonacci extension, with traders now watching a tightly clustered support zone around the rising 100-hour moving average for the next impulse move.
Pullback follows a Fibonacci “first touch” rejection
After a strong run-up to new peaks, USD/INR probed the 161.8% Fibonacci extension before attracting sellers on the first test. The rejection triggered the most notable intraday correction since late November, signaling a shift in tone as momentum cooled.
Confluence support in focus
A key swing area near 89.7900 now aligns with the rising 100-hour moving average around 89.7756, creating a high-conviction support cluster. Price has so far bottomed at 89.873 and was last seen near 89.8760, keeping the pair just above that confluence.
What it means for bulls and bears
– For dip buyers, the 89.7756–89.7900 zone is a logical area to lean against, with risk defined below the 100-hour moving average.
– For bears, a sustained break and close beneath the rising 100-hour MA is needed to turn the tide. Without it, the broader bullish structure remains intact.
Macro backdrop and market tone
Dollar dynamics remain sensitive to U.S. yields and risk appetite. A steadier Treasury curve and muted FX volatility have supported the greenback, while emerging-market FX is trading tactically around data catalysts and central-bank guidance. In thin liquidity pockets, technical levels are exerting outsized influence, amplifying the importance of the confluence support highlighted above.
Key points
- USD/INR retreated after testing the 161.8% Fibonacci extension, triggering the biggest intraday correction since late November.
- Confluence support sits at a key swing area near 89.7900 and the rising 100-hour MA around 89.7756.
- Intraday low printed at 89.873; spot recently hovered near 89.8760.
- Bulls likely defend 89.7756–89.7900; bears need a decisive 100-hour MA break to validate downside momentum.
- Macro drivers: U.S. yields, risk sentiment, and EM FX flows remain pivotal for near-term direction.
Levels to watch
– Immediate resistance: The recent extension peak that capped gains on first touch of the 161.8% Fib.
– First support: 89.7900–89.7756 (swing zone and 100-hour MA).
– A sustained move below the 100-hour MA would open room for a deeper pullback toward prior breakout zones.
Strategy snapshot
– Momentum traders: Watch for confirmation via hourly closes relative to the 100-hour MA.
– Mean-reversion traders: Favor longs on holds above confluence support with tight risk controls.
– Breakout traders: Await a decisive push beyond the extension highs for trend continuation.
Frequently asked questions
Why did USD/INR pull back after hitting the 161.8% Fibonacci extension?
The 161.8% extension is a common profit-taking zone where trend followers reassess positioning. The first-touch rejection often prompts a technical pause or corrective move as momentum normalizes.
Which levels are most important right now?
The confluence at 89.7900–89.7756 is critical. It combines a prior swing area with the rising 100-hour moving average. Holding above this band supports the broader uptrend; a clean break below would encourage sellers.
What would confirm a deeper correction?
Hourly closes below the 100-hour MA, followed by a failure to reclaim it, would indicate bears have seized near-term control and could target previous consolidation zones.
How do macro factors influence this setup?
U.S. yields, risk appetite, and oil-linked EM flows can quickly sway dollar demand. Stronger U.S. data or hawkish policy tones typically underpin USD, while softer yields and improved risk sentiment can cap rallies. Watch upcoming data and central-bank commentary for catalysts.
Is the broader trend still bullish?
Yes, unless price decisively breaks and holds below the 100-hour moving average. As long as the confluence support holds, the bullish structure remains intact, with dip buying likely to emerge. This analysis is for information only and not investment advice, as reported by BPayNews.
