Trade Recommendation: Gold/Indian Rupee

The Gold/Indian Rupee pair (XAU/INR) started its bull run in December 2015 when it printed a higher low of in 69,457.3. The bullish price action attracted a lot of interest as the pair quickly went parabolic. The momentum surge pushed the market to as high as 92,555.8 in July 2016. In less than a year, the market grew by almost 25%.

Unfortunately for buyers, the market capped off the fifth and final wave of the bull run at this level. In addition, the market’s inability to move above 92,000 after several attempts was a clear signal that bulls were exhausted. XAU/INR dropped to 82,740.1 in October 2016. While bottom fishers bought the dip, they could only carry the pair to a lower high of 89,412.9 in November 2016.

With a lower high in place, the pair went into a downward spiral. It nosedived to as low as 76,289.3 in December 2016. From there, it created a series of higher lows to jump start its bullish momentum.

Technical analysis show that the Gold/Indian Rupee pair has taken out resistance of 85,000. This triggered the symmetrical triangle on the weekly chart, which ended the market’s corrective period. Currently, the pair is pulling back from the breakout. This could be your opportunity to buy near the breakout point.

The strategy is to buy as close to 85,000 as possible. Once the brief consolidation period is over, the market will resume its ascent to our target of 97,000.

The process may take six months.

Weekly Chart of XAU/INR

As of this writing, the Gold/Indian Rupee pair is trading at 87,952.2.

Summary of Strategy

Buy: As close to 85,000 as possible.

Target: 97,000

Stop: 83,300


Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.