The USD/INR is testing short term support in early trading as its bearish trend remains evident via mid-term technical charts. While the USD/INR turned in a consistent test of range largely between 73.3000 and 73.7000 the past day, early trading this morning has seen strong downward momentum emerge again. Interestingly, the USD/INR had incrementally seen resistance levels decrease short term the past day.
Global risk appetite appears fragile as the trading day begins. After suffering strong selling many major equity indices rebounded nicely yesterday as they mirrored the results from US markets. However, one solid day of trading may not be enough to convince speculators the tide has turned and they might choose to wait for another day of positive momentum to resume risk-friendly attitudes. However, the USD/INR has already produced volatile trading early this morning as it begins again to test lower support levels.
The USD/INR reflected the more conservative risk-averse trading landscape which transpired late and early this week. Yesterday though saw bearish behavior again begin to trickle into the USD/INR as the forex pair started to sustain a downward move. Today’s early downward spike which developed put the USD/INR within sight of a crucial inflection point.
The 73.0000 level will be looked at as a crucial juncture, it has been certainly broken lower recently, but the problem the USD/INR has suffered is an inability to sustain its values below this level. Reversals upwards have developed rapidly in September when the USD/INR has tested lower marks. Volatility has been seen in the USD/INR recently because trading within the 72.0000 to 73.0000 is rather technically hard to judge.
From late January to late February the USD/INR actually traded between 71.0500 and 71.8000 fairly consistently. Meaning the 73.0000 to 72.0000 value range if it begins to see a test of bearish sentiment could prove wildly volatile because of a lack of technical data to examine. However, the 73.0000 juncture first has to see sustained trading below this level.
Selling the USD/INR within a price vicinity of 73.2500 to 73.3000 could be an interesting speculative opportunity to seek downward momentum for traders. However, traders need to acknowledge the strong reversals which have also been seen upwards after support has been tested. Speculators who believe the USD/INR will enjoy a breakout downwards on bearish selling need to be nimble and be ready for volatile reversals upwards. They should also know when to take profits and not let greed keep them in a trade too long which sees their profits evaporate.
Indian Rupee Short Term Outlook:
Current Resistance: 73.4500
Current Support: 73.1000
High Target: 73.7000
Low Target: 72.9500
