USD/INR Technical Analysis: pair has retraced 38.2% of the Jan-Oct rally

• The USD/INR gapped lower on Monday and hit a three-month low of 70.31, possibly in response to oil's 8 percent slide on Friday.
• The dollar bulls may defend the 38.2 percent Fib level of 70.19 in the short-term, as the 14-day relative strength index (RSI) is reporting oversold conditions for the first time since January.
• More importantly, oil price sell-off is looking overdone and a corrective bounce could be seen in the next few days.
• As a result, USD/INR could test the downward sloping 10-day exponential moving average (EMA) in the short-term. At press time, the 10-day EMA is seen at 71.29. A failure to take out the 10-day EMA will likely recharge engines for a sustained break below the psychological support of 70.00. A close above the 10-day EMA would neutralize the immediate bearish outlook and could yield consolidation.

Daily chart