Speculation and being stubborn are two words which do not always meet with a happy outcome in trading. However, USD/INR speculators who remained optimistic that a bearish trend would begin to emerge were rewarded yesterday with downward price action. The Forex pair remains above the late August to late October price range it demonstrated, but trading the past couple of days have begun to shown technical signals that the USD/INR may be ready to see renewed additional bearish momentum.
After approaching the 74.000 support level yesterday, the USD/INR did see a reversal higher take place, but the movement has not been violent and this may cause speculators to believe another test of the lower ratio will occur. Certainly, the USD/INR is capable of providing short-term spikes which can cause traders emotional angst, but resistance levels do appear to be incrementally lowering too.
Global risk appetite is steady and equity indices have shown the ability to sustain their higher values even in the midst of shor- term mixed results. The USD/INR may continue to attract speculative selling sentiment because targets below the 74.000 support level ‘feel’ more likely to achieve than to see the Forex pair suddenly challenge the 75.000 mark. Resistance levels near the 74.450 to 74.550 ratios may prove adequate and provide a solid stop loss juncture for speculators who want to pursue selling positions.
Before going into the weekend, traders will need to gauge their own risk appetite and should use technical charts as help. November has provided the USD/INR with choppy trading conditions, but it has also shown an ability to maintain some semblance of normalcy.
While highs were approached in early November and the 12th of November near the 75.000 level above, the USD/INR has been able to show it has enough power to trade lower too. On the 9th of November, the 73.600 level was approached below, and yesterday’s failed attempt to puncture the 74.000 mark may prove tempting to speculators who believe the USD/INR has the ability to recapture its value band within the 73.600 to 73.960 range sooner rather than later.
Selling the USD/INR and looking for more downside price action seems the logical endeavor. Risk management will be needed to protect against the possibility of spikes higher, but targeting the 74.150 to 73.9650 support levels looks attractive short term.
Indian Rupee Short Term Outlook:
- Current Resistance: 74.450
- Current Support: 74.150
- High Target: 74.600
- Low Target: 73.950
