The USD/INR has continued to display bearish sentiment and has tested values not traversed since the first week of April in early trading this morning. The USD/INR is trading below 74.0000 and, if lower depths are able to be maintained, it might be a signal to speculators that potential targets below can be justified. However, many dynamics persist for the USD/INR, which could prove to cause sudden volatility, which means traders need to remain alert.
Technically, the USD/INR has been able to re-establish bearish momentum since the 21st of April, which is when the Forex pair hit a high of nearly 75.5500 before it began to reverse in earnest. The high water mark for the USD/INR was accomplished because of the rather jittery atmosphere within India as the nation was confronted by the reality of a new coronavirus outbreak. Since reaching the higher values which challenged prices not seen since the last week of June in 2020, the USD/INR has been able to produce a rather steady move downwards.
The current price of the USD/INR is important not only because it is trading below the 74.0000 mark, but because its current ratio is now challenging a value seen in late February. If the USD/INR can sustain its current levels and not suffer from sudden spikes higher, it is conceivable that the Forex pair could build on bearish momentum and actually try to prove it has the capability to swim within the lower depths of its long-term bearish trend.
Speculators need to be mindful that trading volumes in the USD/INR are often not large, which means large transactions can affect the Forex pair quickly. Traders should make sure they have stop loss orders working to protect against sudden moves higher. If the 74.0000 level is broken, traders should be on the lookout for rather close resistance levels which could be tested.
It may be worthwhile to remain in a bearish mode with the USD/INR and pursue selling positions. While some traders may feel that this is going against the backdrop of negative news coming from India, they should look at technical charts and consider the possibility that the worst of fearful trading within the USD/INR has already been seen, and the Forex pair is attempting to return to levels which were common from late December until the first week of April.
Indian Rupee Short-Term Outlook:
Current Resistance: 74.0070
Current Support: 73.8500
High Target: 74.2100
Low Target: 73.7200
