On the 17th and 18th of November, the USD/PKR proved it has a significant capability to test support levels not challenged since March of this year. After trading in a weak manner and touching all-time highs in late August near 168.3000, the USD/PKR has produced a solid and convincing reversal lower. The recent support it tested did produce a slight bullish run higher, but the Pakistani rupee has shown the ability to sustain its price below the important 160.0000 mark the past couple of days.
As the month of December gets ready to start, speculators who like to trade the USD/PKR may believe the three-month trend of the Forex pair can still traverse lower and may be willing to continue selling. Experienced traders understand that holding the USD/PKR implies carrying charges when the pair is held overnight. Because of this, many traders prefer quick trades with the Pakistani rupee. However, some speculators often want to pursue targets that are beyond the ordinary moves of one day and need patience.
The recent demonstration of the USD/PKR after touching important support and then producing a slight bullish trend higher is also a warning sign. The sudden move higher is a polite reminder that only three months ago the Forex pair was touching all-time highs. Volatility should be expected within the USD/PKR along with the occasional spike. However, in the midst of the slight bullish run higher, the USD/PKR has maintained its current trade range in an organized fashion. The value of the Forex pair has not been wildly exuberant and it has not traversed very far away from the support levels tested recently, which still exist and are relatively close.
The USD/PKR is still well below the all-time highs of August and, in fact, it remains attractive as a potential selling position at its current levels, because resistance levels above via technical charts can be used as potential stop loss ratios. It is a good practice to use limit orders within the USD/INR to be protected against sudden spikes and price fills that can make a trader angry. It is also important for first time speculators of the USD/PKR to manage their risk management wisely and not use too much leverage.
Global risk appetite may remain steady and optimistic in the coming weeks. The Pakistani rupee does not enjoy a great amount of transparency. Its government sometimes manages to work in the shadows and offer economic outlooks which do not always match those of international organizations active in the nation. However, the USD/PKR does seem to be effected by institutional investor sentiment and has certainly produced an eye opening bearish trend since late August, which speculators may be tempted by when looking at the Forex pair’s price action.
Selling the USD/PKR and looking for additional downward momentum may be the logical decision when speculating. Traders may want to wait for slight reversals higher before selling the Forex pair. Speculators who want to pursue bullish trends in December will get their opportunities, but they should be prepared to exit trades quickly using take profit orders so their profits do not vanish into thin air if and when the bearish trend begins to dominate again.
USD/PKR Outlook for December:
- Speculative price range for USD/PKR is 156.4200 to 163.1200.
- Support at 158.3000 is an important and if it is punctured a test of 157.5000 may be seen quickly, if this level falters the USD/PKR could test the 156.4200 mark below.
- Resistance at 160.9000 may prove tough, but if broken higher the USD/PKR could challenge 162.2000 and perhaps trend towards 163.1200.
