The USD/INR has seen a strong bullish mode erupt recently and speculators should be prepared for additional volatility the next two days. The US election is officially underway and traders around the world need to be braced for price fluctuations which may prove dangerous the next forty-eight hours. The USD/INR achieved a high of nearly 74.660 before going into the weekend. Why did this happen? Simply put, it may have been a byproduct via financial institutions making risk adverse moves to guard against the unknown.
However, when trading opened yesterday a rather sharp reversal ensued and eventually a low mark of approximately 74.220 was achieved. Trading since then has seen a range with a high of about 74.515 displayed yesterday, a spike lower this morning upon forex opening and a ‘quiet’ value band has been engaged the past hour. But do not expect the USD/INR to stay quiet for long. Traders need to be vigilant if they expect to profit short term.
The USD/INR has provided a solid bearish trend mid-term but the past week has put an end to this momentum. Cautious sentiment rules the air and this is due to the US election in many ways. The result of the election is unknown and in a bit less than twenty-four hours a winner will likely be crowned for president. If this takes place it is likely the USD/INR could find calmer waters and a bearish trend may reignite and challenge support below.
A potential fly in the ointment would certainly occur if no winner is projected because the election is too close to call in key swing states and a count of mail-in ballots is needed to determine the victor. If this happens, traders should than expect turmoil to occur in forex and the USD/INR to see increased volatility and a strong bull run higher.
No matter what happens over the next day, speculators must be ready for rapid price swings in the USD/INR. While it ‘feels’ like the USD/INR has been overbought recently, traders do not profit on the word ‘feel’ often. Technical charts will produce dynamic perceptions the next two days too, but volatility will certainly factor into the USD/INR which will prove hard to grasp. Speculators need to be careful. The markets will be like a stick of dynamite today and tomorrow.
Indian Rupee Short Term Outlook:
Current Resistance: 74.490
Current Support: 74.210
High Target: 74.700
Low Target: 73.860
