The Pakistani Rupee is trading near important short term resistance against the US Dollar and speculators may suspect it is time to search for a reversal. A five-day chart of the USD/PKR displays technically that support levels have increased in value which is typically a bullish sign for buyers. As a new month of trading gets underway, traders may be tempted to believe a new storyline will be created and the USD/PRK will suddenly develop a wave of selling.
However, speculating against the recent trend may not be the best trade. Yes, global sentiment has shown signs of improving early this week and more risk appetite appears to be increasing, but the technical charts for the Pakistani Rupee should not be inspiring much confidence for the prospect of a reversal.
Resistance of 168.2000 remains a target and has actually been exceeded in recent trading. A historical chart for the USD/PKR will not create a swarm of believers in the Pakistani Rupee’s ability to suddenly find additional value either. The USD/PKR is traversing new highs and this should indicate to speculators that the Pakistani Rupee may be ready to lose further value.
When trading at unprecedented values technically it is natural to look at the numbers and imagine where the forex market may be taking aim. There is little doubt the Pakistan government would likely prefer to see the Pakistani Rupee gain in strength, but they have little ability to create this trend under the present economic conditions the nation is facing. However, short-sellers with a strong desire to be adventurous may look at current support levels of 167.0000 and believe it is a good target. The problem is being able to enter the trade at its current price levels and execute the trade and not get trampled by the spread in the trading platform being used.
If a trader feels the need to sell the USD/PKR, they should do this with a strict limit order at an entry value which allows them to participate in the forex pair wisely. The USD/PRK is a speculative trade and the question that should be asked is regarding the upside and downside risks while considering timeframes.
Pakistani Rupee Short Term Outlook:
Current Resistance: 168.2000
Current Support: 167.0000
High Target: 168.4000
Low Target: 166.4000
