The tight trading range of the USD/INR fell apart yesterday as resistance proved vulnerable and bullish sentiment dominated. Speculators who were looking for support levels to be tested certainly had their emotions trampled upon if they did not have adequate stop losses in place. The resistance level of 74.9000 was broken higher and the 75.0000 juncture was challenged briefly.
A reversal lower did follow, but interestingly the 74.8000 mark which was viewed as a short term guidepost yesterday regarding a possible inflection point higher, is now serving as a short term support level. The question stubborn speculators who have pursued the mid-term bearish trend of the USD/INR will ask is if the forex pair’s downward momentum will resume near term?
Short term reversals higher and lower are inevitable when trading. No speculator should expect to have a winning trade every time they enter the market. The key element determining success will largely depend on the percentage of winning trades you have compared to losing positions. Risk management is a key focus point too because you must learn to always use stop-loss orders to protect your cash.
The USD/INR is trading within the higher value band of its range and showed signs of challenging one-month highs yesterday. However, resistance near the 75.0000 level did hold. The crucial high watermark for the USD/INR is likely the 75.1000 juncture; if this value fails to work as resistance the forex pair could attack July highs which did reach 75.3500.
Should bearish speculators look at the current price action of the USD/INR as a capable area to sell? Risk appetite in the global markets remains steady and has not shown any desire to end soon. It is likely the USD/INR bearish trend which has been seen the past few months when examined whole, may continue to be demonstrated. There is a case to be made for this argument when looking at mid-term technical charts.
Selling the USD/INR within the 74.8500 to 74.9000 vicinity and looking for reversals lower remains an interesting speculative position. You will need to make sure you have stop losses in place if you are shorting the USD/INR as it challenges these higher levels, but if a conservative amount of leverage is used while looking for bearish momentum to reemerge this may be a solid choice for trading.
Indian Rupee Short Term Outlook:
Current Resistance: 74.9600
Current Support: 74.7000
High Target: 75.1000
Low Target: 74.6500
