USD/INR Technical Analysis: Slides farther below 71.00 handle, over 1-month lows

• USD/INR turns lower for the second straight session on Tuesday.
• The technical set-up now seems tilted in favour of bearish traders.

The USD/INR cross failed to capitalize on its early uptick to the 100-day SMA support breakpoint turned resistance near the 71.20 region and drifted into the negative territory for the second consecutive session on Tuesday.

The downtick, marking the fourth day of a negative move in the previous five, dragged the cross further below support marked by 38.2% Fibonacci level of the 68.25-72.63 positive move to its lowest level since November 6.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and are still far from being in the oversold territory, supporting prospects for an extension of the recent rejection slide from the 72.00 handle.

Hence, some follow-through selling might turn the pair vulnerable to accelerate the slide further towards challenging early November swing lows, around mid-70.00s, which also coincides with 50% Fibo. level support.

Failure to defend the mentioned support might be seen as a key trigger for bearish traders and set the stage for a further near-term depreciating move, possibly towards testing levels below the key 70.00 psychological mark.

On the flip side, any attempted recovery back above the 71.00 handle might continue to confront some fresh supply and seems more likely to remain capped near the 71.20-30 zone (100-day SMA region).

USD/INR daily chart