In this piece, I am about to discuss/disclose a pattern, which could be of extreme benefit to anyone looking for views on the USD-INR pair.
As Newton’s first law says, “A body in motion continues to be in motion till the time it meets an equal and opposite force.”
Today I am trying to use the “opposite force” principle. Also, there is this law which says when the “speed of motion” is strong, the inertia could suggest that the body continues to be in motion! Remember this rule???
Enough of science terminology. The reason why I love stock market technicals is that it relates so many of these basic principles of nature to such simplicity that it startles even the connoisseurs of this art.
One of the most widely used indicators is RSI (relative strength index). RSI works just like the acceleration principle. The lower the reading of RSI, the lower is the acceleration and, hence, that much effort it takes to lift the ‘prices’ up. Whereas higher the reading of the RSI, the greater the probability that the ‘prices’ will touch new highs with ease.
Using the second logic, I would try to exhibit how over the past two decades, the USD-INR chart has been finding its momentum the moment it hits a ‘particular’ area of the RSI.
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