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Let’s see how my long USD/INR trade is faring.

If we take a look at the weekly (1W) chart, last week’s candlestick looked pretty solid as it was able to close above 76.00.

USD/INR is still trading above its previous resistance level of 74.00 and as long as that level holds, I remain bullish.

USD/INR Weekly Chart - 04042020

Let’s drill down to the daily (1D) chart

USD/INR Daily Chart - 04042020

The days have been choppy since I entered the trade at 76.40.

Excluding overnight financing costs, I’m currently down about 3 pips. 😔

If you had taken my second entry recommendation and waited to enter at 74.00, you would actually be faring much better right now since you’d be up about 237 pips. 👍

USD/INR has been trading sideways between 74.00 and 76.00 for like the past two weeks.

Price is back above 76.00 once again so hopefully, this support level can hold.

I still think USD/INR can go higher and will remain in my trade.

Due to the coronavirus pandemic, the market is still in “risk-off” mode so I expect the Indian rupee to continue to weaken against the U.S. dollar as investors continue to flee riskier emerging market (EM) assets, including India’s.

What happens to India’s economy matters to the world.

The country is a significant contributor to global growth and a major recipient of foreign investments.

The problem is that if we look for clues from other countries who ordered lockdowns earlier than India, it does not look good.

We are now starting to see early data come out showing how lockdowns imposed by governments have pushed the global economy into the sharpest downturn since the Great Depression.

Kristalina Georgieva, the head of the IMF, speaking at a rare joint news conference with the leader of the WHO, has warned that the economic impact of the coronavirus pandemic would be worse than the 2008 Great Financial Crisis (GFC).

This is a crisis like no other. Never in the history of the IMF have we witnessed the world economy coming to a standstill. It is way worse than the global financial crisis.

One thing I am keeping an eye on is the effect of a new scheme, the FIMA repo facility, that the Fed is implementing to help ease the global shortage of dollars that has hit emerging markets.

The Federal Reserve has established a temporary repurchase agreement facility for foreign and international monetary authorities (FIMA).

This new facility would work in tandem with the dollar swap lines already established by the Fed with other central banks as the coronavirus pandemic rapidly spreads across the world.

According to the Fed:

“The temporary facility for foreign and international monetary authorities, or FIMA, will allow foreign central banks and international organizations with accounts at the New York Fed to temporarily exchange their US Treasury securities held with the Federal Reserve for US dollars, which can then be made available to institutions in their jurisdictions.”

The latest data from the U.S. Treasury Department shows that India holds $164.3 billion worth of treasuries.

The FIMA repo facility will be open starting April 6 and remain open for at least six months.

If there’s something that could halt USD’s strength, it would be this so let’s see what happens.

Let’s just say that the Fed doesn’t respect support and resistance levels.

If they want a weaker U.S. dollar, then they will make it happen. The Fed is more powerful than technical analysis. 😂

Jerome Powell is like Thanos. With a snap of a finger, he can turn half of all forex traders’ accounts to dust. 💀

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.