The USD/INR has demonstrated a reversal higher in the past half-day after the Forex pair traversed to lower values near the 72.2500 mark yesterday. As of this writing, the USD/INR is near the 72.6500 juncture. Two factors for the move higher may be having an influence on the USD/INR short term.
Yesterday’s track lower tested one-month support levels and kept the bearish sentiment within the USD/INR in focus for speculators. The move higher after the lower values were touched may be thought of as a natural reaction within the cyclical Forex market. However, also adding some additional fuel to the momentum upwards, may be nervous sentiment which is being generated by risk-averse trading globally.
Technically, the USD/INR continues to demonstrate a solid ability to produce polite moves down which underscore its bearish sentiment which has been dominant for a while. However, the reversal higher as risk-averse trading shows signs of life may raise the possibility for traders to look at resistance levels as attractive short-term speculative wagers to target buy opportunities.
If the 72.7000 to 72.8400 junctures above begin to be tested, it is possible the 73.0000 mark above may become a focus for the USD/INR. Intriguingly for traders is the notion- too, that these higher price levels have been a solid ground for reversals lower during the bearish trend which has been produced technically since the end of third week in January when the 73.0000 mark has been tested. A glance at a six month chart shows the bearish trend of the USD/INR.
The current trading within the USD/INR should be monitored closely for the possibility of volatility. Yes, the long term has produced a rather solid bearish trend for the USD/INR, but it has not come without choppy conditions being experienced sporadically. The ability of the USD/INR to use the 72.8000 to 73.0000 junctures as an inflection point could prove to be significant for traders again.
With risk-averse conditions swirling in the financial markets short term, the USD/INR may feel the effects of rather turbulent short-term trading. Traders who believe the bearish trend will remain intact cannot be faulted and looking to sell on slight movements higher may prove to be worthwhile, but it should be kept in mind that the near term may also produce moves which will test higher resistance. This opens the door to the potential of trading both sides of the USD/INR using carefully chosen limit orders.
Indian Rupee Short-Term Outlook:
Current Resistance: 72.7100
Current Support: 72.5600
High Target: 72.9600
Low Target: 72.4000
