The USD/INR is testing important resistance levels early today and is threatening to diminish the solid mid-term bearish trend which was accomplished by the Forex pair. The key 74.000 level is within sight and risk-averse trading may make this juncture look potentially attractive for speculators willing to wager on more upside momentum.
The USD/INR has been within the grasp of a solid bearish stance the past few months, but the past two days of trading may be causing speculators to suspect that a short-term reversal upwards will find additional traction. If the 74.000 level is punctured and trading can be sustained above this level, it may indicate that the USD/INR has the potential to test resistance levels within the 74.100 to 74.200 range, which were last tested in mid-November.
The key for speculators now will be the ability to differentiate between potential short-term moves and the mid-term trend which may ultimately prevail. With the holiday season upon the markets and diminishing trading volumes, the short term may continue to produce a test of values seen more than a month ago if behavioral sentiment losses additional optimism. Typically, when going into the holiday season, risk appetite grows before investment houses shutter for their vacations, but because of the sudden emergence of a new coronavirus mutation strain grabbing headlines internationally, pessimism may prevail short term.
However, it will also be important to understand technicall that the USD/INR has turned in a rather significant bearish trend, and although short-term bullish sentiment may prevail, a return to downward momentum may be reignited. Speculators who want to participate today and tomorrow should monitor technical charts and consider that the USD/INR may continue to test resistance levels. Traders can buy the Forex pair on slight reversals lower which test support levels and look for upside action.
The USD/INR may produce rather choppy trading near term and support levels should be watched carefully. If current support junctures are maintained, it will signal that risk-averse trading may prevail for a brief spell and speculators should look for bullish reversals higher to flourish. However, if the 74.600 level is broken lower, it could signal a test of 73.500 to 73.400 could emerge as the bearish trend is reestablished.
Indian Rupee Short-Term Outlook:
- Current Resistance: 74.020
- Current Support: 73.760
- High Target: 74.100
- Low Target: 73.640
