Speculators who have pursued the bearish trend of the USD/INR the past few months may be patting themselves on the shoulder this morning. However, like competition in sports today is a new day and new battles need to be fought. As of this morning the Indian Rupee is challenging support levels not tested since early July.
Current price action for the USD/INR has seen the forex pair trading between 73.9500 and 74.4000 this morning. Speculators will be wise to look at mid-term charts and acknowledge that when the USD/INR has reached these support levels previously in late April and early July strong reversals higher have been experienced.
Is this time different? Will the USD/INR continue to test its current support levels and traverse within values not really traded regularly since March? Global risk appetite must be taken into account and speculative perceptions must be weighed. After pursuing the bearish trend which has been working on a steady basis, traders may now wonder if the USD/INR can sustain its attack on support levels below.
Technical traders will undoubtedly also know that the USD/INR is quite capable of reversing higher and this has been demonstrated often even in the midst of its mid-term bearish trend. Limit orders should be used when trading the USD/INR. Yes, the forex pair does enjoy enough volume which allows a market order position to be placed fairly comfortably, but volatility is always a possibility. As the USD/INR trades near important support ratios it is certain to spark rapid movements which can be dangerous for traders.
Risk reward scenarios should be thought about before trading the USD/INR. If the forex pair continues to venture between 74.0000 and 74.20000 with a fast pace today and tomorrow, traders will want to see if consolidation develops. Speculators looking for upside reversals may want to buy the USD/INR with limit orders near the 74.0000 to 74.1000 range and look for upside momentum with a target near 74.2000 to 74.3000.
Speculators who want to pursue downside momentum should consider selling the USD/INR between 74.1500 and 74.2500 to try and take advantage of more tests of support levels which could potentially happen. After breaking a solid band of consolidation of 74.4500 to 75.00 the past week, the USD/INR will certainly remain volatile and opportunistic as it tries to establish a new value range.
Indian Rupee Short Term Outlook:
Current Resistance: 74.4000
Current Support: 74.0000
High Target: 74.5000
Low Target: 73.8500
