The USD/INR remains locked within the higher range of its short-term value and it is near interesting resistance which looks suspicious. Speculators who trade the USD/INR will no doubt be intrigued by the price action of the Forex pair. After providing a strong bearish trend in the wake of the US election results and almost returning to what would have been considered a known value range, the USD/INR remains situated within a higher price boundary.
Even as global risk appetite seemingly shows its strength and capability, the USD/INR has not seen a great amount of bearish momentum develop. Instead, choppy trading conditions have been rampant and yesterday proved no different from previous days, except to importantly point out that a sudden burst of bearish action did occur within the USD/INR, which did touch the 74.300 vicinity only to see another reversal higher develop.
Speculators may believe there is still opportunity to take advantage of a bearish trend which must develop. However, the word ‘must’ is extremely dangerous. Agreed, it does look from a technical viewpoint like the USD/INR should experience a wave of downward price action. Support levels are certainly attractive, while resistance levels above do seem to be incrementally lowering. But until now, the USD/INR has not demonstrated a trend which can be looked at as a sustained round of momentum recently.
Traders are certainly right to wonder why the USD/INR has not begun to walk in the footsteps of the global risk sentiment which is clearly optimistic. Perhaps large financial institutions, government stimulus and fiscal moves and "clandestine" commerce in India have had something to do with the relatively stronger bullish price movements of the USD/INR. However, the answer as to why the bullish momentum took place is really not so important; what should matter is what is going to occur near term.
Selling the USD/INR continues to look like the correct speculative position. Looking for bearish positions and taking advantage of slight reversals via limit orders to sell the USD/INR remains attractive. While resistance looks adequate, it is support which still looks vulnerable and as the worthwhile target. Traders might want to consider selling the USD/INR short term and hope to ride a wave of bearish momentum which may emerge sooner rather than later.
Indian Rupee Short Term Outlook:
- Current Resistance: 74.700
- Current Support: 74.380
- High Target: 74.900
- Low Target: 74.290
