USD/INR technical analysis: Indian Rupee could begin the week on a positive note

• USD/INR's weekly candles with long upper wicks are signaling buyer exhaustion.
• A pullback could be in the offing, possibly to levels below 71.50. 

Indian Rupee will likely post gains on the first trading day of the week, as USD/INR's bounce from 70.55 seems to have run out of steam.

The back-to-back weekly candles with long upper shadows are indicating buyer exhaustion. The shallow bars on the MACD histogram are also echoing similar sentiments.

Further, the pair created an inside week candlestick pattern last week, which occurs when a specific period's trading range falls within the preceding period's high and low. The candlestick pattern is widely considered a sign of indecision in the market place. In this case, it has appeared following a failure to hold above 72.00 and after a bounce from 70.55 and represents indecision among the bulls.

In such situations, markets usually test dip demand. Therefore, the pair may drop to support at 71.46 on Monday. A break above the previous week's high of 72.00 may invite buying pressure. USD/INR closed at 71.785 on Friday. 

Weekly chart

Trend: Pullback likely

Technical levels