The USD/INR has reversed higher in the past two days and has proven that short term resistance levels appear vulnerable. As of this morning the USD/INR still remains however, within the lower elements of its one month price range, but what may captivate traders with buying sentiment is that this morning’s highs toppled the results from the previous two days of trading.
The USD/INR touched the 74.4000 twice in early trading today, which surpassed the apex on the 17th of August at 74.3900. Short term traders who are technically inclined now have a decision to make regarding their sentiment. From the 9th until the 11th of August the USD/INR traded above the 74.4000 level and tested highs between 74.4900 and 74.5500 during that time.
Yes, the USD/INR is trading near important short term highs, but the last time the forex pair substantially moved above the 74.5500 was between the 16th to the 21st of July. While bullish speculators may look at those results and believe they have the ability to be part of another potential leg up, discretion is advised. Traders need to note that the speed of the higher moves can be fast and that in order to take advantage of these types of moves, first a trader needs to have working orders in place to catch the trend before they often ignite, and second the price action actually needs to take place.
The USD/INR also still in fact does have resistance levels that it not only needs to prove are vulnerable, but its bullish values must sustain the higher price levels and as of yet in the short term this has not sufficiently taken place. The 74.4000 resistance juncture must be proven weak before the forex pair signals another solid leg is going to take place. As of this writing the USD/INR is near the 74.3900 threshold.
Speculators who believe a reversal lower is in the cards could be tempted to be sellers at the current price ratios of the USD/INR as it traces near the 74.3900 juncture. Looking for short term moves lower that will test current support levels via natural cycles is a wager that may prove to be worthwhile. The same trader can legitimately use a fairly tight stop loss ratio near the 74.4100 level to guard against risk.
If a trader wants to go long and they are conservative, they may want to wait for the 74.4150 mark to be tested and buy on momentum. Sights set on trades which are not overly ambitious and cash out winnings if achieved with tactical take profit goals may produce good results too.
Indian Rupee Short Term Outlook:
Current Resistance: 74.4100
Current Support: 74.3050
High Target: 74.4800
Low Target: 74.2080
