PEAK Rupee
USDINR can only this far and it has
RBI’s measures have started to ease pressure on the rupee, which takes me to the long-term chart and currency discussion. Even as the dollar was falling over the last year, USDINR continued to rise because wave 5 was not complete.
USDINR has a monthly RSI reading of 83, the highest since 2002 - is it enough to end wave 5 for the bull run since 2008? The 2002 reading was 90, but that was before the doors were open to a freely traded currency. We are a few more steps away from making it a reliable, freely traded currency the world can trust. The promise of capital account and current account convertibility requires a few more tweaks on the tax side and the implementation of measures to further grow the domestic bond market.
Having said that, we are entering a period of strength for the rupee for the coming few years if wave 5 comes to an end for this particular leg. 2008-2026, an 18-year-long bull market.
As the old saying goes, just because a new peak has been reached, there is no guarantee that it won’t go up further.