The Indian Rupee has experienced choppy waters the past day and this morning’s early trading has the USD/INR within the upper boundaries as resistance is perched intriguingly above and seemingly strong. The USD/INR has maintained a known value band and has also produced a fairly consistent bearish trend since late April. The rather swift price action in the USD/INR in a limited range may serve as a warning that a breakout is still possible.
Yesterday’s trading in the USD/INR can be viewed as fairly cautious as the forex pair anticipated impetus from the US Federal Reserve monetary policy statement. The value of the USD/INR did not break any new barriers which were significant yesterday which indicates the forex pair may be within a solid value range which will continue to trade consistently. Yes, volatility has certainly hit the Indian Rupee the past couple of weeks with sudden spikes lower and higher, but in essence, the USD/INR has delivered rather comfortable results for speculators who weren’t overleveraged or caught not using proper risk management.
Current price action for the USD/INR will entice speculators who believe that the current value of the forex pair is relatively high, resistance above is adequate and a bearish trend will remain intact. As the weekend approaches, traders may be inclined to be conservative and not want to hold positions over Saturday and Sunday, if they do not get the anticipated results they are speculating in the short term. However, as the USD/INR has moved in a rather consolidated manner it may indicate stronger tests of values will be generated near term.
Global risk appetite seems positioned to remain steady to strong. Yesterday’s results on equity indices proved polite and the mixed results showed no violent signs of a sudden selloff emerging. The lack of violent trading on equity indices indicates from a behavioral sentiment perspective, trading conditions will remain tame and price ranges in forex may see comfortable speculative price action. If a sudden breakout does occur in the USD/INR the surge may be downside bearish momentum.
Selling the USD/INR remains tactically the logical decision per technical charts. The resistance junctures of 73.7000 to 73.8000 do look capable of producing protection against higher spikes. If trading within the current vicinity of 73.6000 to 73.6500 is maintained, speculators may want to consider selling the USD/INR with limit orders and looking for downside momentum to develop.
As written yesterday, the 73.3000 level remains a focal point for bearish traders as a target. However, because of yesterday’s choppy trading, the 73.4000 mark must now be proven vulnerable. Short term the USD/INR remains susceptible to quick fluctuations, but its price range allows it to be speculated on without the risk of too much emotional pain.
Indian Rupee Short Term Outlook:
Current Resistance: 73.7000
Current Support: 73.4300
High Target: 73.8000
Low Target: 73.3000
