USD/INR Technical Analysis: Looks north, state exit polls show Modi struggling

The Indian National Rupee (INR) has come under pressure in early trade as exit polls in the state elections are auguring badly for Prime Minister Narendra Modi's ruling party just months ahead of general elections.

As a result, markets may price in a possibility of PM Modi losing general elections next year. Further, the credibility of Reserve Bank of India (RBI) has likely been undermined by Governor Patel's resignation. INR, therefore, may continue to lose ground in the near future.

Technically speaking, a break above 72.46 would only bolster the already bullish setup, as represented by the inverse head-and-shoulders breakout and the bullish crossover between the 5- and 10-day moving averages (MAs). The 14-day relative strength index (RSI) is also biased bullish above 50.00.

All-in-all, the pair looks set to extend gains to 73.09 (Oct. 26 low). The bullish outlook would be invalidated below 72.00. 

Daily Chart