Here is a composite profile of USDINR showing a profile from Jan and a second profile from May.
View of the chart is short term.
From the left :
a) In Blue is the larger composite volume structure from January. This shows the high volume zones in green and low volume zones in pink as horizontal lines.
b) A second profile in yellow is on the right and shows the structure from 07/05 which ended the drop from 54.17 to 52.91.This depicts the volume by price of the rise from 52.91. dated 07/05 as a new auction.
c) We have vwap in blue from this same point with 2 standard deviations ( SD) above and below
d) The purple is the POC ( point of control ) of the profile from 07/05
e) The white horizontal line is the POC of the larger composite from January.
The chart shows that the current price at 56.05 is large and extended and way above the 2SD line . It's not been backed up by a big increase in volume.
55.54 is the first objective on any move lower, followed by a test at 54.65.
The lack of movement in the 2 POC's towards the resting price is an indication that the new price is not value
It tells me that short term inventory is extremely long at this point and short term traders are piling on to the bandwagon with no regards to risk . Longs from lower levels will consider moving out now leaving the train to new entrants .
Again not an indication that price will not move higher, but a safe trader will not see current prices as a good scenario to trade with fresh longs..