INDIA BSE SENSEX and USD/INR

Strong price action should be followed by a decisive breakout on the BSE Sensex Index. Since 2007, Sensex tested 21,250 levels for three times and over the past few months price action suggests a breakout to all time highs is very likely. Confirmation of the breakout should come after a decisive weekly closing above the strong resistance at 21,250 levels. 200-day moving average should act as medium-term support at 20,000 levels if the index fails to clear the strong resistance. Breakout above 21,250 levels will push the index towards 25,000 levels in a short period of time.

Indian rupee gained strength against the U.S. dollar and this trend is likely to continue towards 58-60 area. Strong equity market should bode well for the local currency.