Support levels were punctured in early trading this morning as the USD/INR has broken lower and demonstrated the ability to continue its bearish trend. After a few trading sessions, in which support around the 74.300 finally proved vulnerable and the support near 74.200 crumbled, the USD/INR has begun to re-establish a recently experienced value band for the Indian rupee.
Trading has been volatile the past days with a couple of prominent spikes downward taking place, and significantly, the movements downward have shown an ability to essentially aim for technical levels below which have been targeted by speculators. Trading has proven fast this morning; speculators should be careful if they are pursing the USD/INR and contemplate limit orders to make sure their price fills match their expectations. The current value vicinity near the 73.960 could prove to vanish within the fast market conditions, so traders should be attentive.
However, traders looking for speculative reversals higher based on the belief that some type of balance will be displayed by the USD/INR should consider that the Forex pair does seem to be traversing back to a known range it was able to sustain from late August until the end of October. This may signal that the USD/INR has the ability to actually pursue further bearish momentum. During the mentioned time period of late August until the last week of October, the USD/INR traded within a range of nearly 73.100 to 73.900 with consistency and choppy conditions on occasion.
Global risk appetite does seem ready to be more adventurous. This is not a guarantee that the USD/INR will continue bearish momentum, but it does highlight the current sentiment which exist within the international markets. The USD/INR does appear to have the ability to continue to challenge support levels lower for speculators in the short term.
The 74.000 level may prove to be a vital psychological inflection point near term if the USD/INR can sustain its value below this level. It also shows that a tendency to consolidate it may signal that additional downward action will develop. The USD/INR has delivered a volatile bearish trend the past few trading sessions, and traders may want to continue pursuing additional selling positions if the Indian rupee displays the capability to hold onto its current price band short term.
Indian Rupee Short Term Outlook:
- Current Resistance: 74.100
- Current Support: 73.870
- High Target: 74.270
- Low Target: 73.760
