The USD/INR has demonstrated a solid bearish trend since the 19th of July when the Forex pair toyed with the 75.0000 mark momentarily. Before going into the weekend, however, the USD/INR highlighted the strength of the ‘new’ bearish momentum when the 74.0000 level actually came into sight. The reaction higher afterwards by the USD/INR may have caught some speculators off guard, as the USD/INR reversed late on Friday and the Forex pair is currently near the 74.2300 level.
Intriguingly, the USD/INR has maintained the lower realms of its short-term range when looking at a five-day chart, but it is traversing near the top. This may set off speculative notions in traders who continue to foster bearish sentiment regarding the USD/INR and like to pursue downward pressure. Resistance levels have shown a tendency to incrementally lower the past few weeks. Friday’s reversal higher after achieving a fresh low may prove to be a selling opportunity if resistance now proves to be capable.
The USD/INR is correlating to the broad Forex market too; the USD has shown some weakness the past couple of weeks. The notion that fundamentally the USD may have negative sentiment weighing it down because of another round of stimulus spending about to be enacted may be one reason among many for the bearish sentiment. However, technical traders may not be paying any attention to news flow and may simply be looking at the current trend as a natural reaction to a market which was perceived to be overbought in the middle of July.
The downward slope of the USD/INR certainly tested important marks on Friday. There should be little doubt that approaching the 74.0000 juncture helped spark the move higher in the Forex pair. Speculators with bearish sentiment may be right if they think the reversal higher after reaching the important lows may be ready to run out of power. If current resistance near the 74.2600 to 74.2800 junctures proves sustainable, the USD/INR may have more selling action to demonstrate.
Traders who want to use close stop losses near present resistance levels may be making a worthwhile wager. The USD/INR can move fast, so traders looking for quick-hitting trades are advised to use take profit ratios which are not overly ambitious. If the USD/INR slips beneath the 74.2000 juncture relatively soon and sustains value below this mark, more downward pressure could be seen near term.
Indian Rupee Short-Term Outlook:
Current Resistance: 74.2970
Current Support: 74.1600
High Target: 74.3700
Low Target: 73.9900
